Foreign Business Exposure, Policy Uncertainty, and Capital Flight from Home: Evidence from China Dongxu Li, Xiaoxue Hu, Sep 22, 2021 Using subsidiary-level data of 3,863 Chinese nonfinancial firms from 2000 to 2019, we show that the multinationals have 5.3% higher capital expenditures than the domestic firms relative to the average. The multinational firms’ offshore investment increases with policy uncertainty about the domestic markets. Our analysis suggests that in the face of domestic uncertainty, multinational firms switch to their offshore markets as a leeway to reallocate investment rather than as a response to offshore investment opportunities, as a way to access to foreign capital, or due to competition in the domestic market.
Outward FDI and Domestic Input Distortions: Evidence from Chinese Firms Cheng Chen, Wei Tian, Miaojie Yu, Sep 08, 2021 A recent study shows that domestic input distortions faced by private firms in China have generated extra incentives for those firms to invest and produce abroad. This finding helps explain an astonishing increase in China’s outward foreign direct investment (FDI) flows since the financial crisis.
Industry/Policy View The Natural Interest Rate in China Daniel M. Rees, Guofeng Sun, Sep 01, 2021 The growth of China’s economy and development of its financial markets has created a need for tools to evaluate the stance of monetary policy in China. We contribute to this effort by providing estimates of China’s natural interest rate. We find that China’s natural interest rate averaged between 3–5 per cent between the late 1990s and 2010s, but declined over the next decade to around 2 per cent at the end of 2019. We attribute slightly more than half of the decline in China’s natural interest rate to a lower rate of potential output growth. Our results also suggest that real policy interest rates in China have closely tracked the natural rate over our sample.
Gender Differences in Reactions to Failure in High-Stakes Competition: Evidence from the National College Entrance Exam Retakes Le Kang, Ziteng Lei, Yang Song, Peng Zhang, Aug 25, 2021 We document gender differences in reactions to failure in the National College Entrance Exam, an important, high-stakes competition that solely determines college admission outcomes for almost all teenagers in China. Using unique administrative data in Ningxia Province and a regression-discontinuity design, we find that students who score just below the tier-2 university cutoff have an eight-percentage-point higher probability of retaking...
VoxChina Covid-19 Forum (Second Edition): China’s Post-Lockdown Economic Recovery VoxChina, Apr 18, 2020 The lockdowns induced by Covid-19 have led to unprecedented challenges to economies across the globe. The second edition of the VoxChina Covid-19 Forum focuses on China’s post-lockdown economic recovery, with three presentations that are based on data analysis of small businesses, consumption, e-commerce, and beyond, each for 15 minutes. There will be 30 minutes of Q&As.
VoxChina Covid-19 Forum (First Edition): Public Health and Public Policy VoxChina, Apr 11, 2020 Covid-19 poses unprecedented challenges to the global health and global economy. We are pleased to initiate a series of Covid-19 Public Health and Public Policy Virtual Forums to discuss the impact and policy responses to Covid-19.