China Economic Quarterly Vol.13 , No.2


 date:2014-3-21 15:45:00 source:BiMBA         

China Economic Quarterly

Vol13    No2

January 2014

 

CONTENTS

Papers

The Impact of Inter sectoral Flow of Human Capital on Economic Growth and Social Welfare

Wei Liu  Pengfei Zhang  Ruixin Guo

 

Demand Driving and Ripple Effects of Housing Prices Rising: On Strategies to Deal with the Problems of Housing Price

Yongyou Li

 

Housing Boom and Firm Innovation: Evidence from Industrial Firms in China

Wenchun Wang  Zhao Rong

 

FDI Government Regulation and the WaterPollution in China: An Empirical Test Based on the Decomposition of Industry Structure and the Technology Progress

Yu Zhang  Dianchun Jiang

 

The Environmental Performance of Foreign Direct Investment Firms: The Case of Shanghai

Liguo Lin  Guoqiang Lou

 

The Green Productivity Revolution of Agriculture in China from 1978 to 2008

Gucheng Li

 

The Transaction Costs of Media Supervision on Food Safety Regulatory EfficiencyA System Model and its Equilibrium Analysis

Guohua Ni  Fengtian Zheng

 

Interest Divergence, Costly Communication and Endogenous Authority

Zhongyuan Han  Yiping Guan

 

Collective Action, Political Competition and the Barriers to Development

Fucheng Wei  Wei Zou  Wentao Ma

 

A Century of Global Imbalance:What Empiric Data Say?

Panpan Yang  Jianwei Xu

 

Trade Liberalization and Chinese Firms Export BehaviorDose WTO Entry Facilitate Export Participation?

Qilin Mao  Bin Sheng

 

The Productivity Puzzle of Chinese Exporters: The Role of Processing Trade

Mi Dai  Miaojie Yu  Madhura Maitra

 

Asymmetric Relationship of International Oil Prices and Economic Growth in China

Dayong Zhang  Hong Cao

 

Does Village Democracy Increase Happiness? Evidence from Rural China

Qianheng Chen  Hai Lin  Zhiwang Lv

 

The Effects of Natural Disaster and Government Aid on the Income and Consumption of Rural Households: Evidence from Wenchuan Earthquake

Jingliang Lu  Shuaizhang Feng  Chunrong Ai

 

Firm InnovationLife Cycle and Agglomeration Economies

Xiaofang Dong  Yan Yuan

 

Religious Believing and Social Conflict:Origin or Instrument?

Rongping Ruan  Fengtian Zheng  Li Liu

 

 

Papers

 

The Impact of Inter-sectoral Flow of Human Capital on Economic Growth and Social Welfare

WEI LIU PENGFEI ZHANG*

(Peking University)

RUIXIN GUO

 (University of International Business and Economics)

Abstract  By introducing inter-sectoral flow of human capital into the standard Uzawa-Lucas model with externality, this paper finds that:(i)perpetual flow of human capital outside from the final good sector to the education sector could definitely accelerate human capital accumulation;(ii)nevertheless, faster human capital accumulation could but do not necessarily nourish the economic growth or bring about more social welfare. Therefore, it is not always appropriate for a government to do whatever is necessary to give priority to the development of education.

JEL Classification I25, I28, O11

 

Demand Driving and Ripple Effects of Housing Prices RisingOn Strategies to Deal with the Problems of Housing Price

YONGYOU LI*

Zhejiang University of Finance and Economics

Abstract  Based on the hedonic price modelusing IVQR and spatial econometric methodthis text analyzes the global rise in house price in 35 large and medium-sized cities in China. The inclusion shows the global rising of housing prices results from the pricing force of the market in China. Government intervention can receive some effects of controlling the prices, but cannot really block the real demand of the households.

JEL Classification  R14H00E30

 

Housing Boom and Firm Innovation: Evidence from Industrial Firms in China

WENCHUN WANG ZHAO RONG*

Southwestern University of Finance and Economics

Abstract  Since 1998,the real estate industry in China has experienced rapid growth over the next decade. Industrial firms stepped out of their original line of business and participated in the real estate industry. The extensive involvement of industrial firms in the real estate industry should have influenced their original businesses. Using the Annual Survey of Industrial Firms for the period of 1999 to 2007, we examine how the housing boom influenced the innovation of industrial firms in 35 major cities. Our estimation results indicate that the housing boom had a negative effect on firms innovation propensities.

JEL Classification  O30,P20,R30

 

FDIGovernment Regulation and the Water Pollution in China: An Empirical Test Based on the Decomposition of Industry Structure and the Technology Progress

YUZHANG*

DIANCHUN JIANG

Nankai University

Abstract  By setting up an index of pollution intensity and decomposing it as the factors of industrial structure and the technology progress, we exams the role played by FDI and the government regulation in water pollution. It shows that the inflow of FDI didn’t promote the environmental protection technology while it entered mainly into the heavily polluting industries. Simultaneously, it also led to the loose of the environment regulation. To sum up, the inflow of FDI has a negative impact to the environment in China, and it is necessary to enhance the government regulation on the basis of local joint action.

JEL Classification  F23, O13, Q56

 

The Environmental Performance of Foreign Direct Investment Firms: The Case of Shanghai

LIGUO LIN*

GUOQIANG LOU

 (Shanghai University of Finance and Economics)

Abstract  By adopting firmlevel pollution and financial data, we analyze the environmental performance of foreign direct investment(FDI)firms. Our study shows that FDI firms have better environmental performance than domestic firms; especially, FDI firms have less abovestandard pollution, total pollution emitted and pollution generated in the production process; but as for the pollution removed at the end of pipe, domestic firms remove more pollution. The results indicate that FDI firms have cleaner production process than domestic firms. Therefore, FDI firms better environmental performance should be ascribed to their clean and advanced production technology.

JEL Classification  C31, C81, K32

 

The Green Productivity Revolution of Agriculture in China from 1978 to 2008

GUCHENG LI*

(Huazhong Agricultural University)

Abstract  Using the Unit Investigation and Evaluation Method to evaluate the agricultural pollutants emissions in Mainland China, the paper designs a new TFP index based on Slacksbased Measure directional distance function to calculate the agricultural TFP growth and its components in 19782008. The paper examines the influencing factors of TFP growth from the perspective of institutional changes. At last, the paper points out, the environment problem is still a development problem, and the tradeoff among resources, environment and growth must be taken into consideration. So the agricultural “Quality and Speed” development should be realized by the green productivity revolution.

JEL Classification  Q18, D24, Q16

 

The Transaction Costs of Media Supervision on Food Safety Regulatory EfficiencyA System Model and its Equilibrium Analysis

GUOHUA NI

Beijing Technology and Business University

FENGTIAN ZHENG*

Renmin University of China

Abstract  This paper constructs a system model including fivestakeholders which are producer, consumer, regulator, higher supervision department, as well as media. The results from solving the equilibrium conditions show that: to reduce the transaction costs of media supervision will not only improve the probability of consumer complaints, but also reduce the probability of producerregulator conspiracy, while make producer and regulator work harder. If higher supervision department determines the probability of regulation only according to media exposure, it will lead to a logical paradoxes of food safety supervision system, but reduce the transaction costs of media supervision will improve food safety regulatory efficiency.

JEL Classification  C51, C53, D73

 

Interest Divergence, Costly Communication and

Endogenous Authority

ZHONGYUANHAN  YIPINGGUAN*

Shanghai Jiao Tong University

Abstract  The paper tries to develop a preliminary model for reference for the issues of endogenous authority by analyzing the conditions for authoritative decisionmaking rule and majority decisionmaking rule, respectively within an organization. We have obtained some interesting findings: decision by authority requires small interest divergence and some communication cost among group members, and the party with cognitive advantages will obtain the authority. Decision by voting demands big interest divergence and less communication cost. If authoritative decisionmaking rule is the unique Nash equilibrium, it holds the efficiency as well. However, majority decisionmaking rule may not be efficient.

JEL Classification  D70, D80, C72

 

Collective Action, Political Competition and the Barriers to Development

FUCHENG WEI*

Zhongnan University of Economics and Law

WEI ZOU

Wuhan University

WENTAO MA

Xi’an Jiaotong University

Abstract  This paper establishes an endogenous model of political competition to investigate the idea that improvement of economic development preconditions confront interest group with a tradeoff when it can raise the citizens ability of collective action and thus decreases the interest group's probability of being in power. Firstly, the interest group may prevent the improvement of economic development preconditions. Secondly, whether improvement of economic development conditions does happen, the interest group may increase the investment on political power. Finally, economic growth makes the interest groups facing more serious political challenges. At the end some reform measures are suggested.

JEL Classification  D72, O11, O43

 

A Century of Global Imbalance: What Empiric Data Say?

PANPAN YANG

Chinese Academy of Social Sciences

JIANWEI XU*

Beijing Normal University

Abstract  This paper investigates the scale and coverage of Global Imbalances by exploiting world historical data from 1995 to 2008. First, Global Imbalances is not a recent phenomenon. Secondly, Global Imbalances is always contributed by only a small fraction of important countries in the world, and shows no obvious trend of diffusion. Thirdly, current account surplus and deficit are longterm phenomenon. Many of the fastgrowing countries in the world are associated with accumulation of current account surplus, while longterm deficit countries usually show its own special characteristic of economic growth or have strong relationship with international monetary system.

JEL Classification  F10, F32, F53

 

Trade Liberalization and Chinese Firms’ Export BehaviorDose WTO Entry Facilitate Export Participation?

QILIN MAO  BIN SHENG*

Nankai University

Abstract  Based on the theoretical framework of heterogeneityfirms tradethis paper comprehensively investigates the impact of trade liberalization on firms export behavior by using the micro data of Chinese manufacturing firms. The results show that:(i trade liberalization significantly facilitates Chinese firms export participation. We use suitable instrumental variable to overcome the endogeneity problem and the multiple perspectives of robust analysis to support this conclusion. ii trade liberalization facilitates firms’ export participation through procompetitive effect and cost effectof whichthe cost effect is larger.iii Chinas WTO entry has significantly boosted firms export decisionbut has a larger effect on local firmsand WTO entry is also mainly through the way of intensive margin to affect firms export behavior.

JEL Classification  F10 O10 O20

 

The Productivity Puzzle of Chinese Exporters: The Role of Processing Trade

MIDAI

Beijing Normal University

MIAOJIE YU*

Peking University

MADHURA MAITRA

Columbia University

Abstract  In certain industries and ownership types, Chinese exporters are found to be less productive than nonexporters. We show that this puzzling finding is entirely driven by the presence of firms that engage in export processing. In China roughly a fifth of exporters are engaged in processing trade only. These firms are 10% to 22% less productive than nonexporters. Removing processing exporters restores the traditional finding that exporters have superior performance relative to nonexporters. Our results show that distinguishing between processing and ordinary exporters is crucial for understanding firmlevel exporting behavior in China.

JEL Classification  F14, D22, D24

 

Asymmetric Relationship of International Oil Prices and Economic Growth in China

DAYONGZHANG  HONGCAO*

Southwestern University of Finance and Economics)

Abstract  In this paper, we explore the relationship between international oil price shocks and economic growth in China for both the shortrun and longrun. It shows that the changes in international oil prices have significant impact on economic growth in the shortrun and this relationship is only on directional. There exists an asymmetric longrun relationship. The asymmetric cointegration analysis shows that the impact of crude oil prices to China’s economic growth is stronger when oil prices increase.

JEL Classification  Q43, C32, E69

 

Does Village Democracy Increase Happiness? Evidence from Rural China

QIANHENG CHEN  HAI LIN  ZHIWANG LV*

China Agricultural University)

Abstract  Based on the survey of 1800 rural households and 120 poor villages from 15 counties in 7 provinces in Midwestern China, this paper aims to seek the relationship between village democracy and happiness. For the total sample households, village democracy has a significant positive impact on farmers subjective wellbeing. However, the separate analysis of the poor sample and nonpoor sample gives the contrary conclusions that nonpoor sample could increase their happiness in accordance with enhancing of the village democracy, but not the poor sample. Our IV results show that one percent increase of village democracy index will equal 18.47 percent increase in average farmer's pure income needed to gain the same increase of subjective wellbeing.

JEL Classification  D60 H10 I31

 

The Effects of Natural Disaster and Government Aid on the Income and Consumption of Rural Households: Evidence from Wenchuan Earthquake

JINGLIANG LU* 

SHUAIZHANG FENG 

CHUNRONG AI

(Shanghai University of Finance and Economics)

Abstract  Using a unique rural household survey data in Sichuan collected in 2007 and 2009, we analyze the effect of the 2008 Wenchuan earthquake on income and consumption of farm households. On average, household income declined substantially after the earthquake, although we have identified human capital and nonagricultural employment as important incomestabilizing factors. Living subsidies from the government are more than enough to offset losses in annual income, and help to stabilize consumption after the earthquake. On the other hand, special government aid and bank loans for housing reconstruction are not sufficient to cover all housingrebuilding expenditures.

JEL Classification  Q12,Q54, I38

 

Firm InnovationLife Cycle and Agglomeration Economies

XIAOFAN GDONG*

(Xiamen University)

YAN YUAN

(Southwestern University of Finance and Economics)

Abstract  Firms’ innovation will be affected by its age and the cluster of other firms in the same geographical unit. In this paper, we employ the microlevel Chinese manufacturing data to analyze the relationship of firms innovation and economies of agglomeration from the perspective of firm life cycle. The empirical results suggest that new or young firms are more likely to benefit from Jacobs externalities, and mature or old firms may benefit more from Marshall Externalities. We solve the long existing dispute on which externality improves firms innovationin an original way.

JEL Classification  O31, R12R38

 

Religious Believing and Social Conflict:Origin or Instrument?

RONGPING RUAN*

FENGTIAN ZHENG

Renmin University of China

LILIU

China University of Petroleum,Beijing

Abstract  Based on CGSS and CRRP data, this paper studies the relationship between religion, grievance and mass incident. The results show that religion has significantly positive effects on grievance and mass incident. The reason why believers have more grievances might be that believers experience more inequality. The reasons why believers take part in mass incident more likely are that believers have more grievances and that religion reduces the organizing cost of mass incident. It can be inferred based on these results that religion is not the origin of social conflict, but plays as the instrument in the social conflict.

JEL Classification  H56,Z12,Z13

 

 
 
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