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Higher Education and Corporate Innovation
Dongmin Kong, Bohui Zhang, Jian Zhang, Jul 22, 2020This paper investigates the impact of higher education on corporate innovation using a difference-in-differences approach. We find that Chinese firms in skilled industries generate better innovation outcomes, especially firms headquartered in provinces with more science and engineering college graduates, young firms that are more likely to hire young graduates, and firms located near universities. Also, we show that technological innovation is a mechanism...
The Real Effects of the Chinese Stock Market
Itay Goldstein, Bibo Liu, Liyan Yang, Sep 29, 2021In a 2019 survey jointly administered by the China Securities Regulatory Commission (CSRC) and the PBC School of Finance at Tsinghua University (Tsinghua PBCSF), more than 90% of Chinese public firms report that they closely monitor the stock market for the purposes of learning information to guide real investment decisions and of accessing external financing. These findings provide direct evidence for the wide existence of market feedback via a learning channel and a financing channel, suggesting that the Chinese stock market is not just a side show, but instead, affects the real economy.
Rebalancing in China: Progress and Prospects
Longmei Zhang, Aug 02, 2017This paper develops a framework for China’s rebalancing, reviews past progress, and discusses medium-term prospects. China has advanced well in reducing its excessive external surplus and moving towards consumption and services, while still lagging behind in reducing credit reliance, environmental pollution, and income inequality. Going forward, the economy will continue rebalancing in many dimensions, while credit will remain China’s Achilles heel unless decisive corporate restructuring and SOE reforms are implemented.
Industrial Policy in China: Some Intended or Unintended Consequences?
Jing Cai, Ann E. Harrison, May 30, 2018We explore the consequences of a 2004 tax change in China that reduced the value-added tax (VAT) on equipment investment. While the goal was to encourage technology upgrades, we find little evidence that the reform achieved its intended results. Although firms shifted the composition of investment toward machinery, actual investment rates were unaffected. Firms replaced labor with machinery, leading employment to fall significantly in the treated provinces and sectors. Our results suggest that the primary impact of the policy was to induce labor-saving investment.
Anxiety or Pain? The Impact of Tariffs and Uncertainty on Chinese Firms in the Trade War
Felipe Benguria, Jaerim Choi, Deborah Swenson, Mingzhi Xu, Nov 04, 2020We analyze the firm-level impacts of the US-China trade war since it is of great economic importance to understand how the unprecedented and dramatic increases in the import and export tariffs confronting Chinese firms affected the firm-level policy environment and firm operational outcomes. To contribute to this effort, we study how increases in US tariffs and Chinese retaliatory tariffs raised Chinese firms’ trade policy...
