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on Transition Economics |
| By: | John Ammer; John Rogers; Gang Wang; Yang Yu |
| Abstract: | Although many central banks in the 21st century have become more transparent, Chinese monetary policy communications have been relatively opaque, making it more difficult for financial market participants to make decisions that depend on the future path of interest rates. We conduct a novel systematic textual analysis of the discussion in the quarterly reports of China fund managers, from which we infer their near-term expectations for monetary policy. We construct an aggregate index of manager expectations and show that, as a forecast of Chinese monetary policy, it compares favorably with both market-based and model-based alternative projections. We find that expectations are more accurate for funds that commit more analytical resources, have higher management fees, and with stronger managerial educational background. We also show that fund managers act on these expectations, and that correctly anticipating shifts in Chinese monetary policy improves fund performance. Our results imply that manager skill is an important determinant of fund returns, providing the first evidence from China on a question for which studies of asset management in other countries have reached conflicting conclusions. economy. |
| Keywords: | Chinese monetary policy; Fund managers; Textual analysis |
| JEL: | E52 G23 |
| Date: | 2020–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1285&r=all |
| By: | Pauline Rossi (University of Amsterdam); Yun Xiao (University of Amsterdam) |
| Abstract: | This article uses China's family planning policies to quantify and explain spillovers in fertility decisions. We test whether ethnic minorities decreased their fertility in response to the policies, although only the majority ethnic group, the Han Chinese, were subject to birth quotas. We exploit the policy rollout and variation in pre-policy age-specific fertility levels to construct a measure of the negative shock to Han fertility. Combining this measure with variation in the local share of Han, we estimate that a woman gives birth to 0.65 fewer children if the average completed fertility among her peers is exogenously reduced by one child. The fertility response of minorities is driven by cultural proximity with the Han and by higher educational investments, suggesting that spillovers operate through both social and economic channels. These results provide evidence that social multipliers can accelerate fertility transitions. |
| Keywords: | Fertility, Family planning, China, Spillovers, Peer Effects, Partial population experiment |
| JEL: | C36 D1 J11 J13 O15 O53 |
| Date: | 2020–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20200031&r=all |
| By: | Vu, Tien Manh; Yamada, Hiroyuki |
| Abstract: | This study investigated how the legacies of Vietnamese elites continue to affect top-ranked politicians in Vietnam. We therefore compared a list of elites who passed the imperial examination (1075–1919) at the national level with a list of currently active Vietnamese top-ranked politicians (1930–2020) by matching their home districts. We used the average distance from each district to imperial test venues as instrumental variables for estimating possible connections at the district level. Results showed strong and persistent imperial legacies based on these home districts. This suggests the existence of persistent transmissions via informal institutions and channels of home favoritism. |
| Keywords: | Legacy; Elite; Imperial elite; Politician, Vietnam |
| JEL: | J62 N35 N45 P26 |
| Date: | 2020–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100861&r=all |
| By: | Gouzoulis, Giorgos (University College London); Constantine, Collin |
| Abstract: | This paper uses Piketty et al. (2019)’s dataset to estimate the key drivers of China’s inter-decile income shares between 1978-2015. The key negative determinants of the bottom 50 percent are government consumption, trade openness and unemployment rate. The stable middle 40 percent is explained by the positive effects of government consumption, financial liberalisation and public indebtedness that compensate for the adverse effects of trade openness. Further, we find that government consumption, trade openness, and unemployment rate are positive determinants of the top 10 percent. Two policy ideas emerge from these findings. First, China must overhaul its middle class urban-biased fiscal expenditure and second, the Chinese pension system must be reformed to cover the entirety of its income distribution. Moreover, we argue that the convergence in the interests of the middle class and top incomes might have significant implications for the prospects of China’s democratic transition and theories of democracy. |
| Date: | 2020–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:8sz64&r=all |
| By: | Hanming Fang (University of Pennsylvania); Long Wang (ShanghaiTech University); Yang Yang (The Chinese University of Hong Kong) |
| Abstract: | The entry of High-Speed Railways (HSR) represents a disruptive competition to air-lines, particularly for short- to medium-distance journeys. Utilizing a unique dataset that contains the details of all ?ights departing from Beijing to 113 domestic desti-nations in China since January 2009, we employ a di?erence-in-di?erences approach to examine the e?ects of HSR entry on the quality of service provided by airlines as proxied by their on-time performance, and to identify the channels through which competition leads to quality improvement. We document two main ?ndings. First, the competition from the entry of HSR leads to signi?cant reductions in the mean and variance of travel delays on the a?ected airline routes. Second, the reductions in departure delays–which are controlled mostly by airlines, and the duration of taxi-in time–which are controlled mostly by destination airports, are identi?ed as the main sources of the improvement in the airlines’ on-time performance. |
| Keywords: | Competition; Quality; Transportation; Airlines; High-speed Rail; On-time Performance |
| JEL: | L1 L91 O18 R4 |
| Date: | 2020–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:20-022&r=all |
| By: | Tomasz Chmielewski (Narodowy Bank Polski); Andrzej Kocięcki (Narodowy Bank Polski); Tomasz Łyziak (Narodowy Bank Polski); Jan Przystupa (Narodowy Bank Polski); Ewa Stanisławska (Narodowy Bank Polski); Małgorzata Walerych (Narodowy Bank Polski); Ewa Wróbel (Narodowy Bank Polski) |
| Abstract: | The monetary policy of Narodowy Bank Polski (NBP)—pursued in accordance with the assumptions of the inflation targeting strategy—remains conventional. The Polish central bank has the capacity to change the basic monetary policy instrument, i.e. the short-term interest rate, in both directions. Therefore, the aim of this report—similarly to its previous editions— is to analyse the transmission mechanism of the conventional monetary policy.1 However, this does not mean that the analysis of the monetary policy transmission mechanism faces no limitations. The main problem constraining modelling in this area is related to the lack of variability of the NBP reference rate, very low volatility of monetary policy shocks identified with various methods, full predictability of monetary policy decisions in recent years and wellestablished expectations of private sector concerning stability of the NBP reference rate in the near future. Under these circumstances, drawing conclusions on the strength and delays of the mechanism through which potential changes in the short-term interest rate would affect the economy is more difficult and more uncertain than before. Thus, the hypothesis seems likely that economic agents used to stable interest rates and expecting their maintenance at the current level, can respond to potential changes in monetary policy parameters in another way than in the past. This is illustrated by the high uncertainty of the current response functions of various variables to monetary policy shocks, obtained from models with time-varying parameters. For the above reasons, our view of the monetary policy transmission mechanism in Poland is multi-faceted in this report. Although we show the results of standard models estimated on long samples, we attach greater importance to models with time-varying coefficients and we extend studies of the transmission mechanism at the microeconomic level, taking into account the heterogeneity of entities and their response to monetary policy decisions. In addition, we analyse the importance of various forms of central bank communication, including the text content (tone) of decision-makers’ documents, enabling the central bank to influence the expectations of private sector entities even if short-term interest rates do not change. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:329&r=all |
| By: | Zi, Yuan |
| Abstract: | The extent to which a country can benefit from trade openness crucially depends on how easily it can reallocate resources. However, we know little about the role of domestic frictions in shaping the effects of trade policy. I address this question by analyzing the impact of tariff reductions on the spatial allocation of labor in China and how this impact depends on migration frictions that stem from China's household registration system (hukou). I first provide reduced-form evidence that input trade liberalization has induced significant spatial labor reallocation in China, with a stronger effect in regions with less hukou frictions. The quantitative exercise shows that trade liberalization increases China's welfare by 0.71%. Abolishing the hukou system leads to a direct welfare improvement of 1.33%. Additionally, it increases gains from tariff reductions by 2% and alleviates the latter's negative distributional consequences. I also develop a novel measure of migration frictions associated with the hukou system. |
| Keywords: | hukou frictions; input trade liberalization; spatial labor reallocation |
| JEL: | F14 F15 F16 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14490&r=all |
| By: | Guo, Di; Jiang, Kun; Xu, Chenggang; Yang, Xiyi |
| Abstract: | We examine the effects of China's industrial clustering on resource reallocation efficiency across firms. Based on our county-industry level DBI index panel, we find that industrial clustering significantly increases local industries' productivity by lifting the average firm productivity and reallocating resources from less to more productive firms. Moreover, we find major mechanisms through which resource reallocation is improved within clusters: (i) clusters facilitate higher entry rates and exit rates; and (ii) within clusters' environment the dispersion of individual firm's markup is significantly reduced, indicating intensified local competition within clusters. The identification issues are carefully addressed by instrumental variable (IV) regressions. |
| Keywords: | Competition; Industrial Cluster; Productivity Growth; Resource reallocation |
| JEL: | D2 H7 L1 O1 R1 R3 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14506&r=all |
| By: | Ana Margarida Fernandes; Hiau Looi Kee; Deborah Winkler |
| Abstract: | The past decades witnessed big changes in international trade with the rise of global value chains. Some countries, such as China, Poland, and Vietnam rode the tide, while other countries, many in the Africa region, faltered. This paper studies the determinants of participation in global value chains, based on empirical evidence from a panel data set covering more than 100 countries over the past three decades. The evidence shows that factor endowments, geography, political stability, liberal trade policies, foreign direct investment inflows and domestic industrial capacity are very important in determining participation in global value chains. These factors affect participation in global value chains more than traditional exports. |
| Keywords: | global value chain, factor endowments, trade policy, foreign direct investment, institutions |
| JEL: | F13 F14 F23 O20 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8270&r=all |
| By: | Armenak Antinyan (Wenlan School of Business, Zhongnan University of Economics and Law; National Research University Higher School of Economics, Moscow); Thomas Bassetti (Department of Economics ‘Marco Fanno’, University of Padua); Luca Corazzini (Department of Economics, University Of Venice Cà Foscari; Center for Experimental Research in Management and Economics (CERME)); Filippo Pavesi (School of Economics and Management, LIUC (Carlo Cattaneo University); Stevens Institute of Technology) |
| Abstract: | Concerns are looming that the healthcare systems in low- and middle-income countries (LMICs) are mostly unprepared to combat COVID-19 because of limited resources. The problems in LMICs are exacerbated by the fact that citizens in these countries generally exhibit low trust in the healthcare system, which could trigger a number of uncooperative behaviors. In this paper, we focus on one such behavior and investigate the relationship between trust in the healthcare system and the likelihood of potential treatment-seeking behavior upon the appearance of the first symptoms of COVID-19. First, we provide motivating evidence from a unique national on-line survey administered in Armenia — a post-Soviet LMIC country. We then present results from a large-scale survey experiment in Armenia that provides causal evidence in support of the investigated relationship. Our main finding is that a more trustworthy healthcare system enhances the likelihood of potential treatment-seeking behavior when observing the initial symptoms. |
| Keywords: | COVID-19, Epidemic, Healthcare system, Trust, Survey experiment |
| JEL: | C9 I12 I15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2020:10&r=all |
| By: | Douglas L. Campbell (New Economic School); Karsten Mau (Maastricht University) |
| Abstract: | Bloom, Draca, and Van Reenen (2016) find that Chinese import competition induced a rise in patenting, IT adoption, and TFP by up to 30% of the total increase in Europe in the late 1990s and early 2000s. We uncover several coding errors in an important robustness check of their patent results. When corrected, we find no statistically significant relationship between Chinese competition and patents. Other specifications in the original paper use a problematic log(1 + patents) transformation. This normalization induces bias given low average patent counts for firms in China-competing sectors, and rapidly declining patents across the sample. |
| Keywords: | Patents, China, Europe, Textiles, Trade Shocks, Manufacturing |
| JEL: | F14 F13 L25 L60 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:abo:neswpt:w0264&r=all |