Latest
QR Code-Based Mobile Payments and Financial Inclusion Thorsten Beck, Leonardo Gambacorta, Yiping Huang, Zhenhua Li, Han Qiu, Nov 09, 2022 By means of a unique dataset of around half a million Chinese firms, we investigate the link between the use of a QR code-based mobile payment system and financial inclusion.
A Summary of Retail Investors and Momentum Jun Du, Dashan Huang, Jane Yu Liu, Yushui Shi, Avanidhar Subrahmanyam, Huacheng Zhang, Oct 26, 2022 We explore the link between momentum and retail investing via an identification strategy in China, where retail investors dominate. We propose that due to a round lot restriction, small retail investors are less likely to hold and trade stocks with high nominal prices, and find supporting evidence.
Is China Becoming a Service Economy? Xilu Chen, Guangyu Pei, Zheng Song, Fabrizio Zilibotti, Oct 12, 2022 We document a process of rapid tertiarization of the Chinese economy since 2005. We estimate total factor productivity through different methodologies and find that productivity has increased faster in services than in the manufacturing sector in recent years.
Regional Variation of GDP per Head within China, 1080–1850: Implications for the Great Divergence Debate Stephen Broadberry, Hanhui Guan, Sep 28, 2022 We provide the first regional breakdown of GDP per head for China from the Song dynasty to the Qing, so that regions of similar size can be compared between Europe and Asia to establish the timing of the Great Divergence of living standards.
Combating Cross-Border Externalities Shiyi Chen, Joshua Graff-Zivin, Huanhuan Wang, Jiaxin Xiong, Sep 21, 2022 China implemented a pioneering policy in 2011, the Ecological Compensation Initiative (ECI), which establishes side payments between upstream and downstream provinces in the Xin’an River Basin.
The Fertility Consequences of Air Pollution in China Xuwen Gao, Ran Song, Christopher Timmins, Sep 07, 2022 We incorporate pollution exposure into Becker’s Quantity-Quality (Q-Q) model of fertility and evaluate how air pollution distorts individuals’ fertility behaviors in China. We find that increased pollution over time negatively affects the fertility of ethnic Han people, but does not affect the fertility of ethnic minorities. China’s One-Child Policy increased Han people’s demand for child quality (e.g., health status and education achievement), which can explain the negative association between pollution and fertility for Han people.
Assessing and Addressing the Coronavirus-Induced Economic Crisis: Evidence from 1.5 Billion Sales Invoice Zhuo Chen, Pengfei Li, Li Liao, Zhengwei Wang, Aug 31, 2022 We probe the effects of the COVID-19 pandemic and the subsequent containment policies on business activities in China by exploiting big data on 1.5 billion sales invoices. The average drop in sales was between 23% and 35%, depending on firm size, for the 12-week period after the Wuhan lockdown.
Feedback Trading and the Chinese Put Warrants Bubble Neil D. Pearson, Zhishu Yang, Qi Zhang, Jul 27, 2022 There was a bubble in the prices of put warrants traded on the Shanghai and Shenzhen stock exchanges during the summer of 2007. We use investor trading records from a large securities firm to show that put warrant investors engaged in a particular form of feedback trading. This feedback trading exacerbated an initial run-up in put warrant prices caused by a change in the stock transaction tax, and created the bubble.
Industrial Land Discount in China: A Public Finance Perspective Zhiguo He, Scott Nelson, Yang Su, Anthony Lee Zhang, Fudong Zhang, Jul 25, 2022 Local governments, which serve as monopolistic land sellers in China, face a trade-off when deciding to supply residential land versus industrial land. This trade-off is determined by the different time profiles of revenues from industrial and residential land sales, local governments’ financial constraints, and the extent of local governments’ tax revenue sharing with other levels of government.
Industry/Policy View Omnia Juncta in Uno: Foreign Powers and Trademark Protection in Shanghai’s Concession Era Laura Alfaro, Cathy Ge Bao, Maggie X. Chen, Junjie Hong, Claudia Steinwender, Jul 20, 2022 Trademarks, which identify the source of goods and services, account for the majority of intellectual property filings worldwide. We investigate how firms adapt to the introduction of trademark institutions by exploring a historical precedent: China’s trademark law of 1923, an unanticipated and disapproved response to end foreign privileges in China.
Recent
Judicial Independence, Local Protectionism, and Economic Integration in China Ernest Liu, Yi Lu, Wenwei Peng, Shaoda Wang, Nov 23, 2022 Exploiting the staggered rollout, since 2014, of judicial independence reform that removed local governments’ control over local courts’ financial and personnel decisions in China, we show that judicial independence can reduce local protectionism and foster cross-regional economic integration.
Housing Wealth and Online Consumer Behavior: Evidence from the Xiong’an New Area in China Hanming Fang, Long Wang, Yang Yang, Nov 16, 2022 We provide new evidence on the causal effects of housing wealth on consumer behavior.
Share Pledging in China: Funding Listed Firms or Funding Entrepreneurship? Zhiguo He, Bibo Liu, Feifei Zhu, Jun 01, 2022 Our recent study analyzes the use of share pledging funds in the context of China. Survey evidence shows that a majority of the largest shareholders (67.3%) used pledging funds outside their listed firms, including financing their entrepreneurial activities.
Mapping U.S.-China Technology Decoupling, Innovation, and Firm Performance Pengfei Han, Wei Jiang, Danqing Mei, Dec 01, 2021 We develop measures for technology decoupling and dependence between the U.S. and China based on combined patent data. The first two decades of the century witnessed a steady increase in technology integration (or less decoupling), but China’s dependence on the U.S. increased (decreased) during the first (second) decade. Decoupling in a technology field predicts China’s growing dependence on U.S. technology, which, in turn, predicts less decoupling further down the road...
School Enrollment Restriction on Migrant Children and Human Capital Losses Zibin Huang, Nov 24, 2021 In China, migrant children are at a disadvantaged and sometimes cannot enroll in public schools in migration destinations due to policy restrictions. Some migrant workers then have to leave their children behind in their hometowns, which causes the left-behind children problem. This study finds that if the enrollment restriction on migrant children is relaxed, migration of parents and children will increase, and the average human capital in the society will also increase. Low-skill families from small cities benefit most.
Does China’s Place-Based Land Policy Lead to Spatial Misallocation? Min Fang, Libin Han, Zibin Huang, Ming Lu, Li Zhang, Nov 17, 2021 After 2003, the Chinese central government implemented an inland-favoring land supply policy that distributed more construction land quotas to underdeveloped non-eastern regions. We investigate the effect of the policy and find that it drastically increased land and housing prices in more-developed eastern regions, which consequently created substantial spatial misallocation of land and labor. The policy seems to reduce regional output gaps; however, it hurt...
Do Multinationals Transfer Culture? Evidence on Female Employment in China Heiwai Tang, Yifan Zhang, Nov 10, 2021 In our recent paper (Tang and Zhang 2021), we investigate the global diffusion of culture through multinationals. We study specifically how foreign affiliates serve as a vehicle to diffuse gender norms from their countries of origin to China. Based on Chinese manufacturing firm-level data, we find that foreign affiliates in China tend to employ proportionally more female workers than local Chinese firms within the same industry...
Does External Monitoring from the Government Improve the Performance of State-Owned Enterprises? Shengyu Li, Hongsong Zhang, Nov 03, 2021 We investigate the impact of external monitoring from the government on state-owned enterprise performance, using the variation in monitoring strength arising from a nationwide policy change and firms’ geographic location in China. We utilize a structural approach to estimate input prices and productivity separately at the firm level using commonly available production data. We show that...
Structural Change and the Stability of Aggregate Employment in China Wen Yao, Xiaodong Zhu, Oct 27, 2021 In developed countries, aggregate employment has a strong positive correlation with aggregate output, and it is almost as volatile as output. In China, the correlation of aggregate employment and output is close to zero, and the volatility of aggregate employment is very low. We argue that the key to understanding the stability of aggregate employment in China is labor reallocation between the agricultural and non-agricultural sectors, and that the declining relative demand...
Does ESG Travel around the World? Evidence from Multinational Firms in China Dongxu Li, Xiaoxue Hu, Oct 20, 2021 Using a sample of 3,770 Chinese listed firms during 2015–2020, we find that firms’ ESG ratings increase with foreign sales ratios. The higher-rated multinationals have more foreign subsidiaries located in countries with better ESG conditions, and their equity shares are held to a greater extent by institutional investors, especially by foreign institutions. The multinationals’ higher ESG ratings can be justified by...