Pub Date : 2022-10-20DOI: 10.1080/10971475.2022.2132699
Adesola Ibironke
Abstract This paper examines the relative influence of the volatilities of Chinese and American trade with Africa, by exploring the volatilities, their comovements, and four potential international drivers that can increase or decrease the volatilities. The drivers considered are Euro Area’s trade with Africa; U.S. recessions; economic globalization; and fluctuations in China’s economy. The paper employs the dynamic conditional correlation (DCC-) generalized autoregressive conditional heteroscedasticity (GARCH) model and monthly data spanning 1970M1 to 2020M07. The results show that, without controlling for drivers, the volatilities of Chinese and American trade with Africa are quite high, with similar magnitudes and significant comovements. When drivers are controlled for, Euro Area’s trade does not influence the volatilities significantly. However, America’s recessions make Chinese trade volatility to become higher, while economic globalization makes it to become lower, relative to America’s trade volatility. These results imply that Chinese trade volatility is more influential than America’s trade volatility, due to two international drivers. Furthermore, fluctuations in China’s economy significantly influence the trade volatility of China itself and the trade volatility of the bigger economy, the U.S., which confirms China’s significant international influence. One of the key policy implications of these findings is that globalization does not necessarily increase trade volatility in all contexts. This paper provides new evidence that in the context of a single trade market, globalization is an antidote of trade volatility because it involves the availability of diverse markets across the global economy, which consequently reduces the panic of traders within the single market.
{"title":"The Volatilities of Chinese and American Trade with Africa: Which Country’s Trade Volatility is the Most Influential?","authors":"Adesola Ibironke","doi":"10.1080/10971475.2022.2132699","DOIUrl":"https://doi.org/10.1080/10971475.2022.2132699","url":null,"abstract":"Abstract This paper examines the relative influence of the volatilities of Chinese and American trade with Africa, by exploring the volatilities, their comovements, and four potential international drivers that can increase or decrease the volatilities. The drivers considered are Euro Area’s trade with Africa; U.S. recessions; economic globalization; and fluctuations in China’s economy. The paper employs the dynamic conditional correlation (DCC-) generalized autoregressive conditional heteroscedasticity (GARCH) model and monthly data spanning 1970M1 to 2020M07. The results show that, without controlling for drivers, the volatilities of Chinese and American trade with Africa are quite high, with similar magnitudes and significant comovements. When drivers are controlled for, Euro Area’s trade does not influence the volatilities significantly. However, America’s recessions make Chinese trade volatility to become higher, while economic globalization makes it to become lower, relative to America’s trade volatility. These results imply that Chinese trade volatility is more influential than America’s trade volatility, due to two international drivers. Furthermore, fluctuations in China’s economy significantly influence the trade volatility of China itself and the trade volatility of the bigger economy, the U.S., which confirms China’s significant international influence. One of the key policy implications of these findings is that globalization does not necessarily increase trade volatility in all contexts. This paper provides new evidence that in the context of a single trade market, globalization is an antidote of trade volatility because it involves the availability of diverse markets across the global economy, which consequently reduces the panic of traders within the single market.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"38 1","pages":"220 - 243"},"PeriodicalIF":0.0,"publicationDate":"2022-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82533855","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-20DOI: 10.1080/10971475.2022.2132703
Xin Jin
Abstract This study investigates the effect of trade unions on workers’ job satisfaction in China, based on panel data analyses that accommodate unobserved heterogeneity and the sorting problems—dissatisfied workers are more likely to be union members, and workplaces with poor working conditions are more likely to result in establishing unions. Based on data from the China Family Panel Studies, econometric models are estimated to evaluate the magnitude of the effect of the dynamic change in union membership status (union membership history) on job satisfaction. The results show that while unions effectively improve members’ job satisfaction and union effects vary by household registration type (urban versus rural hukou), unions fail to impress their members with the benefits they offer. The study offers several policy recommendations for rural hukou workers to benefit from union membership more effectively than they do now.
{"title":"Effects of Trade Unions on Workers’ Job Satisfaction: Evidence from China","authors":"Xin Jin","doi":"10.1080/10971475.2022.2132703","DOIUrl":"https://doi.org/10.1080/10971475.2022.2132703","url":null,"abstract":"Abstract This study investigates the effect of trade unions on workers’ job satisfaction in China, based on panel data analyses that accommodate unobserved heterogeneity and the sorting problems—dissatisfied workers are more likely to be union members, and workplaces with poor working conditions are more likely to result in establishing unions. Based on data from the China Family Panel Studies, econometric models are estimated to evaluate the magnitude of the effect of the dynamic change in union membership status (union membership history) on job satisfaction. The results show that while unions effectively improve members’ job satisfaction and union effects vary by household registration type (urban versus rural hukou), unions fail to impress their members with the benefits they offer. The study offers several policy recommendations for rural hukou workers to benefit from union membership more effectively than they do now.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"19 1","pages":"194 - 219"},"PeriodicalIF":0.0,"publicationDate":"2022-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87477768","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-14DOI: 10.1080/10971475.2022.2132701
Han Dong, Chen-Chen Yong, S. Yong
Abstract This paper examines the determinants of services trade in China with a panel of 42 trading partners during the period of 2000–2014. Using augmented Gravity model, the estimated results from Poisson Pseudo Maximum Likelihood (PPML) show that the sectoral output of China and its trading partners, sharing of common borders, fixed telephone subscription in China, exchange rate, perception of lower corruption in partner countries contribute positively to services trade between China and its trading partners. On the contrary but not surprisingly, trade restrictiveness and distance between capitals of China and its trading partners are negatively associated with services trade between China and its counterparts. Greater availability and adoption of information and communication technology in partner countries, proxied by fixed telephone subscription, appear to have a negative (positive) effect on China’s services exports (imports). On the policy front, this paper suggests that the Chinese government should devise policies to deal with non-tariff trade restrictions and improve the country’s telecommunication infrastructure to address the services trade gaps with its trading partners.
{"title":"The Determinants of China’s Services Trade","authors":"Han Dong, Chen-Chen Yong, S. Yong","doi":"10.1080/10971475.2022.2132701","DOIUrl":"https://doi.org/10.1080/10971475.2022.2132701","url":null,"abstract":"Abstract This paper examines the determinants of services trade in China with a panel of 42 trading partners during the period of 2000–2014. Using augmented Gravity model, the estimated results from Poisson Pseudo Maximum Likelihood (PPML) show that the sectoral output of China and its trading partners, sharing of common borders, fixed telephone subscription in China, exchange rate, perception of lower corruption in partner countries contribute positively to services trade between China and its trading partners. On the contrary but not surprisingly, trade restrictiveness and distance between capitals of China and its trading partners are negatively associated with services trade between China and its counterparts. Greater availability and adoption of information and communication technology in partner countries, proxied by fixed telephone subscription, appear to have a negative (positive) effect on China’s services exports (imports). On the policy front, this paper suggests that the Chinese government should devise policies to deal with non-tariff trade restrictions and improve the country’s telecommunication infrastructure to address the services trade gaps with its trading partners.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"32 1","pages":"182 - 193"},"PeriodicalIF":0.0,"publicationDate":"2022-10-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72990191","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-13DOI: 10.1080/10971475.2022.2096809
Sho-ei Komatsu, A. Suzuki
Abstract Income inequality is one of the most serious issues globally and China is the representative examples of this issue. Income inequality remains high in China and may negatively affects subjective well-being. This study clarifies whether income inequality affects subjective well-being in China. Using five waves of the 2010-2018 data from China Family Panel Studies, a panel data analysis reveals the following: First, general income inequality measured by provincial Gini coefficients has a significant U-shaped impact. Second, between-group income inequality, measured as income ratio between urban hukou residents and migrants with rural hukou, has a significant U-shaped impact. Third, urban-rural income inequality measured by provincial urban to rural household per capita income ratio has an inverted-U-shaped impact. To address endogeneity problems of income inequality, this study adopts instrumental variable approach. For the further robustness checks of the validity of the instrumental variable used, this study adopts the recent Conley et al. (2012) bounds approach. Our results are robust after addressing endogeneity problem. One important policy implication stemming from our results is the need to adopt strategies that ensure a more inclusive society without hukou-related and urban–rural discrimination.
{"title":"The Impact of Different Levels of Income Inequality on Subjective Well-Being in China: A Panel Data Analysis","authors":"Sho-ei Komatsu, A. Suzuki","doi":"10.1080/10971475.2022.2096809","DOIUrl":"https://doi.org/10.1080/10971475.2022.2096809","url":null,"abstract":"Abstract Income inequality is one of the most serious issues globally and China is the representative examples of this issue. Income inequality remains high in China and may negatively affects subjective well-being. This study clarifies whether income inequality affects subjective well-being in China. Using five waves of the 2010-2018 data from China Family Panel Studies, a panel data analysis reveals the following: First, general income inequality measured by provincial Gini coefficients has a significant U-shaped impact. Second, between-group income inequality, measured as income ratio between urban hukou residents and migrants with rural hukou, has a significant U-shaped impact. Third, urban-rural income inequality measured by provincial urban to rural household per capita income ratio has an inverted-U-shaped impact. To address endogeneity problems of income inequality, this study adopts instrumental variable approach. For the further robustness checks of the validity of the instrumental variable used, this study adopts the recent Conley et al. (2012) bounds approach. Our results are robust after addressing endogeneity problem. One important policy implication stemming from our results is the need to adopt strategies that ensure a more inclusive society without hukou-related and urban–rural discrimination.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"104 1","pages":"104 - 123"},"PeriodicalIF":0.0,"publicationDate":"2022-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75981635","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-13DOI: 10.1080/10971475.2022.2096807
Qi Shu
Abstract Using firm-level panel data from 1998 to 2015 for high and new technology firms in the Pearl River Delta in China, I investigated the effect of policy-directed industrial agglomeration on firm financing (trade credit and bank loan). I find that small and young firms are more likely to utilize trade credit, while large and old-established firms tend to rely on bank loans. I also find that the agglomeration effect is more remarkable for foreign and private-owned firms both in trade credit and bank loans, while state-owned firms fail to benefit from the effect of industrial agglomeration. These findings suggest that in China, policy-oriented industrial agglomeration plays an important role in alleviating financial constraints. Additionally, endogeneity issue is addressed by using two-stage estimation with instrumental variable and system generalized method of moments (GMM) estimation.
{"title":"Agglomeration and Firm Financing: Evidence from High and New Technology Chinese Firms in the Pearl River Delta","authors":"Qi Shu","doi":"10.1080/10971475.2022.2096807","DOIUrl":"https://doi.org/10.1080/10971475.2022.2096807","url":null,"abstract":"Abstract Using firm-level panel data from 1998 to 2015 for high and new technology firms in the Pearl River Delta in China, I investigated the effect of policy-directed industrial agglomeration on firm financing (trade credit and bank loan). I find that small and young firms are more likely to utilize trade credit, while large and old-established firms tend to rely on bank loans. I also find that the agglomeration effect is more remarkable for foreign and private-owned firms both in trade credit and bank loans, while state-owned firms fail to benefit from the effect of industrial agglomeration. These findings suggest that in China, policy-oriented industrial agglomeration plays an important role in alleviating financial constraints. Additionally, endogeneity issue is addressed by using two-stage estimation with instrumental variable and system generalized method of moments (GMM) estimation.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"25 1","pages":"124 - 146"},"PeriodicalIF":0.0,"publicationDate":"2022-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84618541","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-12DOI: 10.1080/10971475.2022.2096810
Sérgio Edegar Girardi de Quadros, André Filipe Zago de Azevedo
Abstract China is the second largest global economy and Brazil’s largest trade partner. Ever since the financial crisis of 2008, there has been deliberate intention on the part of the Chinese government to internationalize its currency. This study aims to investigate the perception of Brazilian companies regarding the internationalization of renminbi and its impacts on trade with China. We performed a qualitative research through a theoretical sampling, selecting nine major companies presenting relevant trade with China. The research shows that, by adopting renminbi, companies can reap economic benefits such as increase in trade and reduction in transaction costs, for instance. Some barriers have also been identified, coinciding with the literature review, such as lack of liquidity, reliability and independence of the Chinese monetary authority and other issues related to cultural differences. The companies interviewed support certain initiatives, such as entering into swap agreement and the adoption, by the Brazilian Central Bank, of renminbi in its international reserves. Finally, this study proposes financial cooperation agreements with China, aiming at reducing barriers on employing the Chinese currency and increasing business deals between both countries.
中国是全球第二大经济体，也是巴西最大的贸易伙伴。自2008年金融危机以来，中国政府一直有意推动人民币国际化。本研究旨在探讨巴西企业对人民币国际化的看法及其对中国贸易的影响。我们通过理论抽样进行了定性研究，选择了九家与中国进行相关贸易的主要公司。研究表明，通过采用人民币，企业可以获得经济利益，例如贸易增长和交易成本降低。与文献综述一致，还发现了一些障碍，例如中国货币当局缺乏流动性、可靠性和独立性，以及与文化差异相关的其他问题。受访企业支持某些举措，比如签订货币互换协议，以及巴西央行(Brazilian Central Bank)将人民币纳入其国际储备。最后，本研究提出了与中国的金融合作协议，旨在减少使用人民币的障碍，增加两国之间的商业交易。
{"title":"The Internationalization of Renminbi: The View of Brazilian Companies Regarding the Internationalization Process of Chinese Currency","authors":"Sérgio Edegar Girardi de Quadros, André Filipe Zago de Azevedo","doi":"10.1080/10971475.2022.2096810","DOIUrl":"https://doi.org/10.1080/10971475.2022.2096810","url":null,"abstract":"Abstract China is the second largest global economy and Brazil’s largest trade partner. Ever since the financial crisis of 2008, there has been deliberate intention on the part of the Chinese government to internationalize its currency. This study aims to investigate the perception of Brazilian companies regarding the internationalization of renminbi and its impacts on trade with China. We performed a qualitative research through a theoretical sampling, selecting nine major companies presenting relevant trade with China. The research shows that, by adopting renminbi, companies can reap economic benefits such as increase in trade and reduction in transaction costs, for instance. Some barriers have also been identified, coinciding with the literature review, such as lack of liquidity, reliability and independence of the Chinese monetary authority and other issues related to cultural differences. The companies interviewed support certain initiatives, such as entering into swap agreement and the adoption, by the Brazilian Central Bank, of renminbi in its international reserves. Finally, this study proposes financial cooperation agreements with China, aiming at reducing barriers on employing the Chinese currency and increasing business deals between both countries.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"11 1","pages":"147 - 162"},"PeriodicalIF":0.0,"publicationDate":"2022-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74136975","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-11DOI: 10.1080/10971475.2022.2096808
Qincheng Zhang
Abstract FDI flows in China have increased for decades, but the sectoral and country-origin distribution change over times. Chinese FDI inflows have experienced a shift from manufacturing to real estate and service sectors. A series of factors including labor cost increase, currency appreciation, overcapacity of production, domestic competition rise and US trade war cause negative effects on manufacturing FDI flows. However, rising purchasing power, consumer demand and market capacity create new opportunities for foreign business in China. The government makes efforts to nurture service trade as an engine of economic growth alongside trade in goods. Many incentive policies have been launched for numerous service industries. These are the push hand behind the rapid rise in service FDI. The neighboring countries or regions in Asia and free trade ports with taxation advantages contribute vast majority of the FDI in China. Hong Kong's status as the largest supplier of FDI to the mainland has become increasingly prominent over the past 20 years, partially due to so called “round-trip” FDI. Chinese economic diplomacy promotes regional integration in East and Southeast Asia, and creates conditions for the liberalization of intra-regional investment. Closer trade connections with European countries boost the EU investment in China over recent years. Our studies of FDI's structural changes in China can generate policy implications widely for the government, foreign companies and investors, as well as developing countries committed to FDI attraction.
{"title":"Sectoral and Country-Origin Dynamics of FDI in China in 1997-2020","authors":"Qincheng Zhang","doi":"10.1080/10971475.2022.2096808","DOIUrl":"https://doi.org/10.1080/10971475.2022.2096808","url":null,"abstract":"Abstract FDI flows in China have increased for decades, but the sectoral and country-origin distribution change over times. Chinese FDI inflows have experienced a shift from manufacturing to real estate and service sectors. A series of factors including labor cost increase, currency appreciation, overcapacity of production, domestic competition rise and US trade war cause negative effects on manufacturing FDI flows. However, rising purchasing power, consumer demand and market capacity create new opportunities for foreign business in China. The government makes efforts to nurture service trade as an engine of economic growth alongside trade in goods. Many incentive policies have been launched for numerous service industries. These are the push hand behind the rapid rise in service FDI. The neighboring countries or regions in Asia and free trade ports with taxation advantages contribute vast majority of the FDI in China. Hong Kong's status as the largest supplier of FDI to the mainland has become increasingly prominent over the past 20 years, partially due to so called “round-trip” FDI. Chinese economic diplomacy promotes regional integration in East and Southeast Asia, and creates conditions for the liberalization of intra-regional investment. Closer trade connections with European countries boost the EU investment in China over recent years. Our studies of FDI's structural changes in China can generate policy implications widely for the government, foreign companies and investors, as well as developing countries committed to FDI attraction.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"138 1","pages":"89 - 103"},"PeriodicalIF":0.0,"publicationDate":"2022-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86890664","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-12DOI: 10.1080/10971475.2022.2058181
Miaomiao Tao, L. Goh
Abstract Empirical evidence demonstrates that market-driven carbon trading scheme (ETS) is a crucial instrument for China to control environmental pollution. Based on the panel data of China’s 283 prefecture-level cities from 2006 to 2017, this research investigated the transmission mechanism, direct and indirect effects of ETS on carbon emission intensity (CEI) using difference-in-differences (DID) model, propensity-score-matched difference-in-differences (PSM-DID) model at national, regional, and local levels (cities with different industrial characteristics). The results demonstrated the mediating effects of total energy consumption, energy consumption structure, and industrial structure upgrading in the incentive role of ETS on CEI reduction. Moreover, ETS directly and effectively reduced CEI at the national level, while the spatial heterogenous effects were identified at regional and local levels, which emphasises the necessity and importance of unified carbon trading market establishment and classified governance.
{"title":"Effects of Carbon Trading Pilot on Carbon Emission Reduction: Evidence from China’s 283 Prefecture-Level Cities","authors":"Miaomiao Tao, L. Goh","doi":"10.1080/10971475.2022.2058181","DOIUrl":"https://doi.org/10.1080/10971475.2022.2058181","url":null,"abstract":"Abstract Empirical evidence demonstrates that market-driven carbon trading scheme (ETS) is a crucial instrument for China to control environmental pollution. Based on the panel data of China’s 283 prefecture-level cities from 2006 to 2017, this research investigated the transmission mechanism, direct and indirect effects of ETS on carbon emission intensity (CEI) using difference-in-differences (DID) model, propensity-score-matched difference-in-differences (PSM-DID) model at national, regional, and local levels (cities with different industrial characteristics). The results demonstrated the mediating effects of total energy consumption, energy consumption structure, and industrial structure upgrading in the incentive role of ETS on CEI reduction. Moreover, ETS directly and effectively reduced CEI at the national level, while the spatial heterogenous effects were identified at regional and local levels, which emphasises the necessity and importance of unified carbon trading market establishment and classified governance.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"31 1","pages":"1 - 24"},"PeriodicalIF":0.0,"publicationDate":"2022-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76687723","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-12DOI: 10.1080/10971475.2022.2058180
Thi Huong Giang Vuong, Yang-Che Wu, Tzu-Ching Weng, Huu Manh Nguyen, X. Vo
Abstract An essential issue of listed firms is adjusting their capital structure as stock market volatility increases. Our study examines this concern by using panel data of the Shanghai Stock Exchange for the period 2008–2018. We find that stock market volatility has immediate positive effects on both total market leverage and short-term market leverage but a negative influence on the long-term market leverage of Chinese listed firms. In this scenario, Chinese listed firms adjust their debt structure by using high bank debts and cutting trade credit due to lower debt costs. Further analyses confirm that the proportion of bank debts to total debts visibly increases while that of trade credit to total debts distinctly decreases. Furthermore, we implement robust tests regarding potential issues, such as sample selection, model selection, endogenous factors, and quantile regression to strengthen the robustness of the main findings. This study provides the first framework for investigating a link between the stock market volatility and capital structure decisions in a typical emerging market.
{"title":"Capital Structure Choices and Stock Market Volatility: Evidence from Chinese Listed Firms","authors":"Thi Huong Giang Vuong, Yang-Che Wu, Tzu-Ching Weng, Huu Manh Nguyen, X. Vo","doi":"10.1080/10971475.2022.2058180","DOIUrl":"https://doi.org/10.1080/10971475.2022.2058180","url":null,"abstract":"Abstract An essential issue of listed firms is adjusting their capital structure as stock market volatility increases. Our study examines this concern by using panel data of the Shanghai Stock Exchange for the period 2008–2018. We find that stock market volatility has immediate positive effects on both total market leverage and short-term market leverage but a negative influence on the long-term market leverage of Chinese listed firms. In this scenario, Chinese listed firms adjust their debt structure by using high bank debts and cutting trade credit due to lower debt costs. Further analyses confirm that the proportion of bank debts to total debts visibly increases while that of trade credit to total debts distinctly decreases. Furthermore, we implement robust tests regarding potential issues, such as sample selection, model selection, endogenous factors, and quantile regression to strengthen the robustness of the main findings. This study provides the first framework for investigating a link between the stock market volatility and capital structure decisions in a typical emerging market.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"41 1","pages":"25 - 49"},"PeriodicalIF":0.0,"publicationDate":"2022-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73402412","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-01DOI: 10.1080/10971475.2022.2058183
Haiwen Zhou
Abstract For a large economy trying to achieve industrialization, it needs to develop indigenous technological capacities to make growth sustainable. Industrialization can be challenging to achieve because it might be difficult to develop technologies without changing culture and political institutions which are useful to maintain ruling. Rulers in ancient China choose institutions to prevent internal rebellions. Industrialization was a new goal for the Qing government in the 19th century, and previous institutions were not designed to handle this issue. China’s high growth rates after 1978 resulted from internal reforms to increase efficiency and external openness to absorb foreign capital, knowledge, and technologies. China’s state capacity and leadership supported developing technological capacities in the catch-up process.
{"title":"State Capacity and Leadership: Why Did China Take off?","authors":"Haiwen Zhou","doi":"10.1080/10971475.2022.2058183","DOIUrl":"https://doi.org/10.1080/10971475.2022.2058183","url":null,"abstract":"Abstract For a large economy trying to achieve industrialization, it needs to develop indigenous technological capacities to make growth sustainable. Industrialization can be challenging to achieve because it might be difficult to develop technologies without changing culture and political institutions which are useful to maintain ruling. Rulers in ancient China choose institutions to prevent internal rebellions. Industrialization was a new goal for the Qing government in the 19th century, and previous institutions were not designed to handle this issue. China’s high growth rates after 1978 resulted from internal reforms to increase efficiency and external openness to absorb foreign capital, knowledge, and technologies. China’s state capacity and leadership supported developing technological capacities in the catch-up process.","PeriodicalId":22382,"journal":{"name":"The Chinese Economy","volume":"17 1","pages":"50 - 68"},"PeriodicalIF":0.0,"publicationDate":"2022-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75888906","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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