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Developing Credit Markets in Provinces Improves Innovation among Firms in the People’s Republic of China

Hua Shang, Quanyun Song, Yu Wu, Mar 28, 2018

Our recent research finds that provincial credit market development, through improving credit allocation, enhances firms’ product innovation incentives and outcomes in the People’s Republic of China. We further show that firms’ credit constraints and performance are two channels through which credit market development affects the innovative capacities of firms. We suggest that in order to further promote firms’ innovations, China should encourage financial institutions to actively screen those firms who have good performance but face credit constraints.

Do Richer Households Exit Agriculture? Positive Income Shocks in Rural China

Jessica Leight, Jul 18, 2018

Rural households in China have experienced a steadily increasing rise in their real income over the last twenty years as economic reforms have revitalized this sector. Analyzing an unusual natural experiment generated by an increase in prices paid for mandatory grain procurement in China post-1993, I seek to provide evidence around how an increase in permanent income affects households’ production portfolio. Evidence suggests that households experiencing positive income shocks substitute away from agricultural production and are more likely to migrate and to invest in non-agricultural production. They also increase their observed levels of borrowing and non-staple consumption.

The Impact of Health Insurance on the Wellbeing of Older Chinese

Sisi Yang, Katja Hanewald, Aug 12, 2020

Using data from the China Health and Retirement Longitudinal Study (CHARLS) in 2011, 2013 and 2015, we analyze whether the universal health insurance system in China increases the life satisfaction of middle-aged and older adults and to what extent the type of health insurance affects their life satisfaction. We find that the life satisfaction of middle-aged and older adults does not depend on having any health insurance...

Magnification of the “China Shock” Through the U.S. Housing Market

Yuan Xu, Hong Ma, Robert Feenstra, Jan 22, 2020

The “China shock” operated in part through the U.S. housing market, which is one important reason the China shock was as big as it was. If housing prices had not responded at all to the China shock, then the total employment effect would have been reduced by more than one-half. Even when fully recognizing that housing prices responded to the China shock, the independent employment effect of the China shock is still reduced by around 30%.

The Productivity Consequences of Pollution-Induced Migration in China

Gaurav Khanna, Wenquan Liang, Ahmed Mushfiq Mobarak, Ran Song, Apr 07, 2021

Severe air pollution induces workers to move from productive to unproductive regions, reducing their contribution to the aggregate productivity in China. In this paper, we quantify the productivity and welfare consequences of this important new pattern of migration. We find that the productivity losses from pollution through the indirect migration channel are approximately as much as the direct health costs of pollution.