China Economic Quarterly International最新文献

This paper quantifies the impacts of collecting system on social insurance contribution compliance, taking advantage of a reform around 2000 in China. Using firm-level data, we find that the actual contribution rate and the probability of participation were raised by 3% and 5 percentage points respectively, after changing the collection department from social security department to local tax department. Mechanism analyses show that the effect is larger in areas where the tax collection capacity is stronger and the reform had no significant effects on SOEs.

In this paper we used two primary indicators and four secondary indicators to construct China's labor marketization index. We calculated the index at the prefecture-level cities from 2010 to 2016 and tested its correlation with macroeconomic indicators. The results show that there has been much progress in labor marketization in China over the period, and the key to this progress is the quantity factor rather than the price factor. Progress in labor marketization varies considerably across regions and at different levels of cities. The external validity test confirms that this index has a strong scientific basis.

We built a labor market model in China to incorporate key features of the current Chinese Hukou system (a system of household registration). Simulation analyses showed that when the Hukou system was fully reformed or abolished, more older workers would migrate to cities, leading to a rise in national GDP and a large reduction in nation-wide income inequality. Moreover, we found that the cost of the policy could be offset by the increase in national GDP. That is to say, the budget concern should not be the obstacle for the Hukou reform. In order to reduce inequality, the government should promote more fundamental Hukou reforms.

The management by administrative authorities of law violations represents one of the instruments for enforcing laws in China, the other way is lawsuit. The law allows administrative discretion to achieve efficiency but may lead to unfair law enforcement. Governments’ establishing patent administrative discretion criteria can deter unfair law enforcement by guiding administrators to determine administrative penalties. As such, a quasi-experimental approach testing the discretion criteria established by provincial patent administrative authorities was used in the current study to evaluate the impact of discretion criteria on law enforcement and innovation among firms. The empirical evidence shows that patent administrative discretion criteria increase the number of patent administrative law enforcement cases and encourage firms to apply for more patents, and this impact is larger for firms in industries where the new product market is broader, patent license fees are higher, patent rights easier to be infringed upon, and R&D duration is lengthier.

Using housing transaction data from Beijing during 2013–16, this paper evaluates the education premium for good primary schools and its changes. We use the regression discontinuity method to estimate the average education premium and its variation year by year. We take advantage of differences in the right to school enrollment between homeowners and renters to determine the discontinuity boundaries. Furthermore, the difference-in-differences method is applied to investigate the changes in housing prices triggered by changes in the school attendance zones. We find that the average education premium for the top 59 high-quality primary schools in Beijing was about 11% and increased each year. During the sample period, the increase accumulated to more than 50%. The changes in the school attendance zones led to a significant 1.5%–3.5% rise in housing prices. This shows that it would be better to increase the supply of quality education rather than only guiding the demand for it to promote educational equity.

Using firm-level data covering 709 cities in 128 countries, we examine the role of a comprehensive list of business and institutional environment variables at the sub-national level in explaining firm employment and productivity growth. We find basic protection (with corruption as an element), access to finance and infrastructure, and the existence of a strong agglomeration environment to be critically important. By contrast, human capital and a list of refined business environment variables related to labor regulations, tax, and land access are unimportant. We also find that the effects of the business environment vary according to firm size, age, and the host country’s level of development.

China is now facing the challenges of high leverage. Our study has examined the role of firms’ rising debt in explaining the decrease in labor share in recent years. We developed a model to show that firms may strategically use debt to increase their bargaining power, resulting in lower labor share. Empirical evidence shows the labor share is robustly negatively related to debt per worker, and the negative correlation varies across ownership, labor union and maturity of debt. The findings imply that the de-leveraging policy may help alleviate the worsening income inequality.

This paper provides a critical discussion of monetarism and the difficulties of understanding macroeconomic developments after the publication of Friedman and Schwartz’s classic 1965 article through a monetarist lens, especially for the period following the great financial crisis. This paper proposes three research directions for broadening the classical monetarist framework and provides new foundations for monetary economics.

How do firms’ credit constraint affect their export mode choices between direct exporting and indirect exporting through intermediaries? This study explores this issue in a heterogeneous firm model where firms differ not only in productivity but also in credit levels. Our model predicts that more productive and financially less constrained firms tend to choose the more advanced export mode and that for the cutoff firms, there is an overall inverse relation between credit and productivity with diminishing marginal rate of substitution. These theoretical predictions are borne out in a large cross-country firm-level dataset over the period 2002–2012.

Autocracies have diverse records of economic growth. This paper provides a theory of endogenous coalition formation to explain economic performance in autocracy. The nature of the ruling coalition that the autocrat relies on to rule the society and extract rents affects the degree of inclusiveness of the autocracy's political and economic institutions that ultimately determines economic performance. A stable ruling coalition has to be invasion-proof --- i.e., being able to resist invasion from outside --- and coalition-proof --- i.e., being able to prevent split from inside. In a political environment where side payments are allowed to buy political support, a ruling coalition is coalition-proof if and only if it satisfies Condition E, i.e., every pair of its member groups holds similar levels of political power relative to the power of any third group (including the autocrat). When more pairs of groups satisfy Condition E in a society, the ultimate ruling coalition becomes more inclusive and societal output is increased.