A Bridge on Economic Issues between China and the World
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Throwing Good Money after Bad: Zombie Lending and the Supply Chain Contagion of Firm Exit
Yun Dai, Xuchao Li, Dinghua Liu, Jiankun Lu, Jan 19, 2022Zombie lending to downstream firms does not reduce the exit likelihood of upstream firms. Worse, it distorts efficiency-based firm exit in upstream industries. The exit distortion effect works through the trade credit chain and is more profound in industries with stricter financial constraints and tighter supply chain connections
Structural Change and the Stability of Aggregate Employment in China
Wen Yao, Xiaodong Zhu, Oct 27, 2021In 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...
The Value of Childhood Vaccination in China
Hamid Reza Oskorouchi, Alfonso Sousa-Poza, David Bloom, Sep 09, 2020Using data from the China Health and Retirement Longitudinal Study (CHARLS) we estimated the effect of childhood vaccination on later-life schooling and cognitive abilities of elderly Chinese. We found that being vaccinated in childhood increases schooling by one year and improves numeracy and episodic memory scores by 6 percent on average. These encouraging results confirm the powerful and long-lasting benefits of childhood vaccination.
The Impact of Intranational Trade Barriers on Exports: Evidence from a Nationwide VAT Rebate Reform in China
Jie Bai, Jiahua Liu, Feb 19, 2020It is well known that various forms of non-tariff trade barriers exist within a country. Empirically, it is difficult to measure these barriers as they can take many forms. We take advantage of a nationwide VAT rebate policy reform in China as a natural experiment to identify the existence of these intranational barriers due to local protectionism and study the impact...
Consumer-Financed Fiscal Stimulus Evidence from Digital Coupons in China
Jing Ding, Lei Jiang, Lucy Msall, Matthew J. Notowidigdo, Feb 05, 2025In 2020, local governments in China began issuing digital coupons to stimulate spending in targeted categories such as restaurants and supermarkets. We find that the coupons caused large increases in spending of 3.1–3.3 yuan per yuan spent by the government. The large spending responses do not come from substitution away from non-targeted spending categories or from short-run intertemporal substitution. We conclude that digital coupons are a cost-effective way to provide targeted fiscal stimulus to specific sectors of the economy.
