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| 1 |
ID:
170106
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| Summary/Abstract |
This paper analyzes the determinants of China's striking performance in textile exports in the time period 2001–2016. We integrate the analysis by Lall and Albaladejo (World Development, 2004), based only on China and its main Asian competitors' market share dynamics, by estimating an extended version of a traditional export function, derived from the imperfect substitute model, including a proxy of non-price competitiveness. The key long-run elasticities for each Asian exporter are thus computed and discussed in a panel-data framework, and the different export performances are examined taking into account the interaction between the estimated parameters and the growth rates of relative prices, foreign demand and product quality. Lastly, we decompose the textile export growth differences between China and its rivals into the three main channels of trade competition, i.e. price, quantity and quality. Our findings show that China is crowding out most of its rivals with a competitive strategy based on a mix of low and decreasing relative prices and non-price policies aiming at stimulating export volumes. However, certain weaknesses in the Chinese trade prospects emerge when quality improvement is considered.
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| 2 |
ID:
170093
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| Summary/Abstract |
Using a brand new data, we document seriously low credit accessibility from financial institutes for small and micro enterprises (SMEs) and examine whether and how it affects entrepreneurial activity in China. We find that credit constraints significantly decrease the possibility of households becoming entrepreneurs. Based on our estimates, 10% decrease in the probability of being credit constrained would be associated with 4.3 million newly-created household businesses, or equivalently 11 million jobs. In the end, factors that determine credit accessibility are exploited and the result indicates that institutional deficiency plays a role in shaping the pattern of financing difficulties in China. Specifically, we find households in regions with more commercialized banking or those with government-sector workers are more likely to access to credit when other relevant variables are conditioned. In particular, the positive role of government-sector workers is more pronounced in regions with weaker market institutions.
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| 3 |
ID:
170109
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| Summary/Abstract |
This paper examines peer effects on the academic performance of rural migrant students at both the class level and the individual level. The dataset is from a survey of more than 3000 students from all of the 87 migrant schools in Shanghai and Suzhou, China. The two-stage least squares method with an instrumental variable is employed to control for the endogeneity of peer performance variables. We found that peer effects exist among the migrant students at both class and individual levels. A one-point increase in the average of standardized math grade (SMG) of his/her classmates is associated with an increase of 0.5 points in the SMG of an individual (1.01 standard deviation). A one-point increase in a learning companion's SMG can result in an increase of 0.046 points in the student's SMG. The findings reveal that private migrant schools can improve rural migrant students' academic performance by optimizing students' class allocation and building study groups, providing an additional boost to the input-output efficiency of the human-capital education of the children of migrant workers in China, but the effects of these measures are limited.
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| 4 |
ID:
170095
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| Summary/Abstract |
This study evaluates the importance of contracting institutions as a source of comparative advantage across Chinese provinces. We find that industries differ in their reliance on relationship-specific investments. Provinces with better contracting institutions specialize in industries with more intensive relationship-specific investments. We implement two proxies to measure contracting institutions, including efficiency of the legal system and service of contract enforcement. The empirical results of this study indicate that contracting institutions play a role in shaping the patterns of industrial specialization. Specifically, the service of contract enforcement has the first-order effect on the patterns of industrial specialization in China; by contrast, legal jurisdiction plays a modest role.
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| 5 |
ID:
170083
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| Summary/Abstract |
This paper considers how proficiency in Standard Mandarin, China's official language, affects employment probabilities in China. Previously, research has focused on language proficiency' effects on earnings, with little research having been done on how proficiency affects employment probabilities vis-à-vis unemployment. Data will be taken from the China Labor-force Dynamics Survey (CLDS), which makes it possible to distinguish between employed and unemployed people. Using a linear probability model, it is estimated that a one-standard-deviation increase in Mandarin proficiency decreases unemployment probabilities by 5%. Significant heterogeneity is also found. The ‘employment premium’ for language proficiency is highest for younger people and people living in urban areas. The effects on employment is not significant for older people, and people living in rural areas.
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| 6 |
ID:
170102
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| Summary/Abstract |
New economic geography (NEG) models predict that costly transport and the spatial distribution of demand affect the profits firms can earn in different locations, leading to higher wages for workers employed in cities with better geographic access to markets. In light of the ongoing economic integration and market reforms that occurred in China after 1995, we use three waves of Chinese Household Income Project (CHIP) data to measure the extent to which the influence of market access on wages changed and affected wage dispersion across Chinese cities over the next 12 years. Employing the gravity-based method of Redding and Venables (2004) to calculate the market access available to firms located in each city, we test whether the elasticity of the wage with respect to local market access increased over time. We find that in all three years market access of the worker's location has a positive and significant influence on the wage. Consistent with extensive labor market reforms of the late 1990s, the estimated wage elasticity doubles between 1995 and 2002 and is stable thereafter. Our estimates indicate that wages of all workers become more responsive to market forces in a manner consistent with NEG predictions, both skilled and unskilled and those working for state as well as private enterprises. We also provide evidence that these results are not driven by omission of other forms of agglomeration or by selection bias. Estimated spatial differences in nominal wages are large: a worker moving from an inland location to the coast in 2007 would have doubled his or her nominal wage. Counterfactual analysis indicates that spatial differences in market access contribute to wage inequality, but less so over time.
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| 7 |
ID:
170107
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| Summary/Abstract |
The education of migrant children critically determines the level of human capital of China's future labor force. The majority of migrant children in Chinese cities now study in public schools. This paper uses self-collected data in Shanghai in 2010 and 2012 to evaluate the performance of migrant students in public elementary schools. We find that across schools, migrant students with better family background enter into schools with higher quality. Within the same schools, migrant students perform as well as their local counterparts, in both cognitive and non-cognitive dimensions. Our results suggest that there is no evidence of within-school discrimination against migrant students within public schools, and the key to improving their education is access to better schools.
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| 8 |
ID:
170111
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| Summary/Abstract |
The international trade of waste has been an important and growing part of the global economy during the last two decades, which imposes regulatory challenges to governments in the South to protect the environment. This paper investigates the effect of border controls with a difference-in-difference design by exploiting a unique natural experiment, China's Operation Green Fence (OGF) implemented in 2013. We find that the OGF exerted a significant deterrent effect on the waste imported into China. Specifically, we find that the import weight of waste grew by 9.48 percentage less and the import price declined by 7.6 percentage more compared to those of the non-waste. The results are robust to a series of robustness checks, and there is no similar reaction in other regions, where the OGF was not initiated.
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| 9 |
ID:
170091
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| Summary/Abstract |
In this paper, we use China’s value-added tax (VAT) reform in 2007, which was aimed to encourage fixed investment purchasing, as a natural experiment to explore the effect on firm financial leverage. Results show an expansion in firm balance sheet after the reform, manifested by greater liabilities (long-term, short-term and total liability) and asset. Moreover, in terms of the ratio to asset, it’s found that long-term liability rose while the short-term liability dropped, and as a net effect, the total asset-liability ratio declined as the latter effect dominated. To theoretically explain the observed patterns, three mechanisms are highlighted, “income effect”, “maturity-match effect” and “market disciplining effect”, where income effect corresponds to a proportional expansion of balance sheet while the latter two effects alter the composition of firm leverage.
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| 10 |
ID:
170103
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| Summary/Abstract |
Has education led to secularization? Using microdata from the Chinese General Social Survey (CGSS), we take the implementation of the Compulsory Education Law (CEL) in 1986 in China as the instrumental variables (IV) for personal educational attainment. We study the causal effect of education on personal religious beliefs and explore the potential mechanisms. The empirical results show that education can lead to secularization. More precisely, individual religious belief decreases by 1.5% with one additional year of personal education. In addition, the increase in regional urbanization significantly affects religious beliefs by replacing the insurance function of religion and reducing information acquisition costs. Moreover, there is an alternative relationship between religious activities and social activities, and women affected by the CEL experience a higher negative impact on religious beliefs than men.
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| 11 |
ID:
170088
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| Summary/Abstract |
Little is known about the firm-level dynamics behind trade responses to political tensions. This article reinvestigates variation in the travel pattern of the 14th Dalai Lama to study how political tensions affect trading decisions of Chinese importers. Using monthly trade data from China Customs covering imports of machinery and transport equipment from 173 countries over the 2000–2006 period, our empirical results show a significant reduction of imports in response to foreign government members' meetings with the Dalai Lama. In line with the idea that Chinese importers face a trade-off between bearing costs from suboptimal trade transactions and costs from not accommodating the government, this ‘Dalai Lama Effect’ operates at the intensive margin, i.e., via a decrease in the import volume per importer. Examining differential effects across types of firm ownership, we find that the observed effect is driven by state-owned enterprises (and foreign-invested firms) and not by private companies. Moreover, while direct importers temporarily reduce their trade with Dalai Lama-receiving countries, there is some evidence that trade intermediaries fill the void. Overall, we find the effects to be much more short-lived than previously thought.
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| 12 |
ID:
170097
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| Summary/Abstract |
This study pioneers the application of the New Economics of Labor Migration theory to outline and estimate two opposite effects of labor loss driven by the migration and remittances of adult children on the health of left-behind elderly parents through the changing rural market constraints. We use China's rural household survey data and simultaneous equation econometric techniques to estimate the effects of migration on the physical and mental health of left-behind elders. Results indicate that the loss of labor due to migration has a significantly negative effect on the health of left-behind elders, but remittances from migrants can compensate for the adverse effect. This study provides a comprehensive understanding that remittances from migration relax the constraints on household resource allocations in undeveloped rural areas with imperfect market conditions. Overall, left-behind elderly parents benefit from migrant children both physically and mentally.
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| 13 |
ID:
170090
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| Summary/Abstract |
We examine the effects of China's trade liberalisation, post entry into the WTO, on the greenhouse-gas (GHG) emissions of its trading partners. Using complementary estimators we establish that China's liberalised trade had significant effects on the GHG emissions of its trading partners. Increased exposure to Chinese exports increased the growth of consumption-based emissions while reducing production-based emission. The increase in consumption-based emissions was larger than the decrease in production emissions. Consumption emissions increased both through a scale effect (consumption increased) and a composition effect (consumption became more emissions intensive). Decomposition analysis suggests that the link between exposure to Chinese exports and the increase consumption-based emissions is the emissions embodied in imports: The emissions embodied in imports increased and imports became more emissions intensive. The increase in imported emissions was not offset by a reduction in domestic production of emissions either in final consumption goods or exports. (JEL: Q53, Q54, Q55).
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| 14 |
ID:
170086
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| Summary/Abstract |
This paper investigates the treatment quality of the hospitals sector in China during 2009–2014. The treatment quality of a hospital is higher if relatively more medical services are provided with fewer deaths. Our research question is twofold: (i) Does the pressure of for-profit lower treatment quality by causing more deaths? (ii) Can government subsidy raise treatment quality by releasing the pressure from market competition? Our empirical results show that the treatment quality in China has been improving during the studied period. There are pieces of evidence that both marketization and government subsidies can boost the treatment quality of the hospitals sector. The co-existence of market force and government regulation is beneficial to the patients.
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| 15 |
ID:
170108
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| Summary/Abstract |
This paper aims to examine the effect of public expenditure on local officials' promotion. The main objectives of this study are as follows. Firstly, we seek to discuss if the expansion of public spending will contribute to local official promotion. Secondly, we analyze, if the positive effect is possible, how is the influence of expenditure structure on official promotion; for example, what is the different between the effect of productive expenditure and welfare expenditure. Finally, we also examine the hysteresis effect of local official promotion. The panel data from 284 Chinese cities for the period of 1990–2016 are estimated using the probit model. The major findings are the following: (1) fiscal gap will positively affect officials' promotion; and (2) basic construction expenditure and official's promotion is positively correlated; however, (3) education expenditure's effect on officials' promotion is negative; and (4) real estate investment improve officials' position in the promotion championship; and finally, (5) in the early stage of official change, public expenditure and investment will statistically significant than the latter stage.
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| 16 |
ID:
170096
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| Summary/Abstract |
By using the survey data of China’s rural households from 2003 to 2009, we identified the determinants of renting in and out the plots and estimated their impact on household welfare. First, we developed a bivariate dynamic probit model for the behaviors of renting in and out to manage the impact of the intertemporal decision-making that has been somewhat ignored by the literature; next, we developed a panel multiple endogenous treatment effect model for land rental impact to manage the self-selection problem stemming from the unobserved variables. The results show that regardless of renting in or out, both scenarios have statistically significant positive effects on the net income and balance of disposable financial assets, and renting out also has a significant positive effect on consumption expenditure.
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| 17 |
ID:
170089
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| Summary/Abstract |
This paper empirically examines the effect of language barrier on elderly migrants' health status by exploiting individual-level data from the “China National Health Survey of Migrants 2015” database. We build an indicator of language barrier with geographical distribution information of Chinese dialect regions, and further separate the language effect from the migration effect by checking whether migrants move into a region with a different dialect. Results indicate a significant and negative impact of the language barrier on the health status of elderly migrants. Specifically, a language barrier results in poorer health conditions for younger elders. The mechanism test shows that a language barrier reduces migrants' abilities to build a social network, which is harmful to their health. Elderly migrants who are less-educated, live in host residence for a shorter time and move for business incentives suffer more from a language barrier. This study proves the power of a verbal language barrier to migrants' health.
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| 18 |
ID:
170104
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| Summary/Abstract |
China's rapid development has led to an unprecedented increase in migration rates as an ever-growing number of rural residents migrate to urban areas to seek better job opportunities and help alleviate family poverty. Economic pressures and structural restrictions force many of these migrant workers to leave their children behind in their rural homes, which has led to the emergence and expansion of a new subpopulation in China: left-behind children (LBCs). This study examines the impacts of parental migration on the educational outcomes (specifically math achievement) and mental health (specifically anxiety) of LBCs using data covering 7495 children in a prefecture of Shaanxi Province (from three surveys conducted between 2012 and 2014). We distinguish between “both parents migrating,” “one parent migrating,” “only a father migrating,” and “only a mother migrating.” We also explore the impacts on male versus female LBCs. We find no significant impact of parental migration on the math achievement of LBCs. In terms of mental health, however, our results indicate that left-behind girls were negatively affected by one parent migrating, especially if the migrating parent was the father. The findings suggest that it may not be necessary for policy makers to design special programs to improve educational outcomes of LBCs in general. However, local committees, schools, and parents should pay particular attention to left-behind girls living with only one parent, as they may be more vulnerable to mental health problems than their peers.
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| 19 |
ID:
170098
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| Summary/Abstract |
By allowing large classes of movable assets to be used as collateral, the Property Law reform transformed the secured transactions in China. Difference-in-differences tests show firms operating with ex-ante more movable assets expand access to bank credit and prolong debt maturity. However, the reform does not seem to improve the efficiency of credit allocation, as debt capacity of ex-ante low quality firms expands the most following the reform. Credit expansion also does not lead to better firm performance. These findings are not driven by confounding factors such as improvements in creditor and property rights protection. Our results also cannot be explained by other important reforms which were introduced around the same time as the introduction of the Property Law. These include anti-tunneling and split-share reforms and amendments to the corporate tax structure in China. We conduct explicit robustness tests for these other reforms and hence contribute to the empirical literature on the reform process in China with new findings.
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| 20 |
ID:
170101
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| Summary/Abstract |
In this paper, we attempt to reconcile the mixed effects of political connections on corporate innovation. Using the China Employer-Employee Survey (CEES), we find political connections contribute to innovative activities for those firms with innovative entrepreneurs but impedes innovative activities for those without innovative entrepreneurs. After solving the endogeneity problems and correcting the sample selection bias, the baseline results do not change much. Moreover, we find political connections can help firms obtain economic benefits such as tax preference and government subsidies which, however, are utilized by firms to increase fixed asset investment. But such positive effect of political connections on fixed asset investment greatly reduces when the firm's entrepreneur has a strong spirit of innovation. These results provide a reasonable explanation for the change in the direction of the effect of political connections on corporate innovation. This paper succeeds in reconciling the mixed effects of political connections on corporate innovation by taking the entrepreneur's innovative spirit into account.
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