Pub Date : 2017-12-08DOI: 10.3868/S060-006-017-0026-8
Shiqiang Li
This article tries to explain elitism in Chinai¯s governmental decision making. Our model shows that the governmentsi¯ expected utility increases with a bureaucrati¯s ability to make decisions under the flexible framework of delegation and communication (with separated reporting strategy). In the early of 1950s, Chinai¯s government choose a flexible decision making framework in order to efficiently manage many affairs in a complex environment. This initial choice started the process of a self-reinforcing demand for ability inside of the flexible decision making framework. With the current reforms of streamlining administrations and retreating from the market, the elitism of Chinai¯s government might reverse.
{"title":"Decision Making and Ability: An Explanation of Elitism in China¡¯s Government","authors":"Shiqiang Li","doi":"10.3868/S060-006-017-0026-8","DOIUrl":"https://doi.org/10.3868/S060-006-017-0026-8","url":null,"abstract":"This article tries to explain elitism in Chinai¯s governmental decision making. Our model shows that the governmentsi¯ expected utility increases with a bureaucrati¯s ability to make decisions under the flexible framework of delegation and communication (with separated reporting strategy). In the early of 1950s, Chinai¯s government choose a flexible decision making framework in order to efficiently manage many affairs in a complex environment. This initial choice started the process of a self-reinforcing demand for ability inside of the flexible decision making framework. With the current reforms of streamlining administrations and retreating from the market, the elitism of Chinai¯s government might reverse.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"635-659"},"PeriodicalIF":0.8,"publicationDate":"2017-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45818336","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-12-08DOI: 10.3868/S060-006-017-0024-4
M. Schütz, Handuo Li, N. Palan
Since the Reform and Opening-up policy had been implemented in 1978, mainland China has experienced significant economic growth, with GDP rising on an annual average of about 10%. However, this growth miracle was far from being evenly distributed across space. It is, therefore, the aim of this paper to study the evolution of spatial disparities in economic development across the country between 1993 and 2012, a period which is characterized by all provinces having access to international markets and being open for international investors. We seek to answer the question of whether Central and Western Chinese provinces were catching up with the East. We define i®catching upi¯ as a growing similarity among spatial units. Convergence processes might manifest in four dimensions, including (1) the spatial allocation of employment, value added generation and the fixed capital stock, (2) forms of technical change, (3) productivity patterns, and (4) income distribution. Results show that persistent phases of convergence appeared. However, in some cases the catching up of Chinai¯s less developed parts with the flourishing East was limited to only a few Western and Central Chinese provinces. A high degree of path-dependency in economic development prevented catching up from taking place in a more uniform manner.
{"title":"Are Central and Western Chinese Provinces Catching up with the East? An Empirical Analysis of Convergence Processes across China","authors":"M. Schütz, Handuo Li, N. Palan","doi":"10.3868/S060-006-017-0024-4","DOIUrl":"https://doi.org/10.3868/S060-006-017-0024-4","url":null,"abstract":"Since the Reform and Opening-up policy had been implemented in 1978, mainland China has experienced significant economic growth, with GDP rising on an annual average of about 10%. However, this growth miracle was far from being evenly distributed across space. It is, therefore, the aim of this paper to study the evolution of spatial disparities in economic development across the country between 1993 and 2012, a period which is characterized by all provinces having access to international markets and being open for international investors. We seek to answer the question of whether Central and Western Chinese provinces were catching up with the East. We define i®catching upi¯ as a growing similarity among spatial units. Convergence processes might manifest in four dimensions, including (1) the spatial allocation of employment, value added generation and the fixed capital stock, (2) forms of technical change, (3) productivity patterns, and (4) income distribution. Results show that persistent phases of convergence appeared. However, in some cases the catching up of Chinai¯s less developed parts with the flourishing East was limited to only a few Western and Central Chinese provinces. A high degree of path-dependency in economic development prevented catching up from taking place in a more uniform manner.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"571-606"},"PeriodicalIF":0.8,"publicationDate":"2017-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45642574","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-12-08DOI: 10.3868/S060-006-017-0023-7
Dongsheng Di, W. Coats, Yuxuan Zhao
From the 1970s, the global currency system has two features: the use of one or a few sovereign currencies as the global reserve asset and the floating exchange rate regime between major currencies. This paper points out that the costs of the dollari¯s use as an international reserve currency exceed the benefits for both the US and the rest of the world. These costs include the exporting of American manufacturing as a byproduct of its current account deficit needed to supply its currency to the rest of the world. In addition to the detriment to trade from unpredictable exchange rate fluctuations, the termination of the U.S. obligation to redeem its currency for gold also removed an important restraint on deficit financing for the US and many other countries in the short-run, thus promoting excessive leverage that was a major contributor to the 2008 financial crisis. The paper suggests replacing several main countriesi¯ currencies in international reserves with a real Special Drawing Right (SDR) issued according to currency board rules.
{"title":"Why Does the World Need a Reserve Asset with a Hard Anchor","authors":"Dongsheng Di, W. Coats, Yuxuan Zhao","doi":"10.3868/S060-006-017-0023-7","DOIUrl":"https://doi.org/10.3868/S060-006-017-0023-7","url":null,"abstract":"From the 1970s, the global currency system has two features: the use of one or a few sovereign currencies as the global reserve asset and the floating exchange rate regime between major currencies. This paper points out that the costs of the dollari¯s use as an international reserve currency exceed the benefits for both the US and the rest of the world. These costs include the exporting of American manufacturing as a byproduct of its current account deficit needed to supply its currency to the rest of the world. In addition to the detriment to trade from unpredictable exchange rate fluctuations, the termination of the U.S. obligation to redeem its currency for gold also removed an important restraint on deficit financing for the US and many other countries in the short-run, thus promoting excessive leverage that was a major contributor to the 2008 financial crisis. The paper suggests replacing several main countriesi¯ currencies in international reserves with a real Special Drawing Right (SDR) issued according to currency board rules.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"545-570"},"PeriodicalIF":0.8,"publicationDate":"2017-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43232307","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-12-08DOI: 10.3868/S060-006-017-0022-0
Li-hui Wang, Junyi Shen
This paper empirically analyzes the factors affecting personal income in urban China using survey data of the i°Preference and Life Satisfaction Surveyi± conducted by the Global COE project of Osaka University from 2009 to 2013. We consider education level as an endogenous variable, and both ordinary least squares (OLS) regression and instrumental variable (IV) regression are performed. We find a number of factors, such as sex, age, education, and marriage that significantly affect personal income. In addition, differences between different occupations are also investigated.
{"title":"Examining the Factors Affecting Personal Income: An Empirical Study Based on Survey Data in Chinese Cities","authors":"Li-hui Wang, Junyi Shen","doi":"10.3868/S060-006-017-0022-0","DOIUrl":"https://doi.org/10.3868/S060-006-017-0022-0","url":null,"abstract":"This paper empirically analyzes the factors affecting personal income in urban China using survey data of the i°Preference and Life Satisfaction Surveyi± conducted by the Global COE project of Osaka University from 2009 to 2013. We consider education level as an endogenous variable, and both ordinary least squares (OLS) regression and instrumental variable (IV) regression are performed. We find a number of factors, such as sex, age, education, and marriage that significantly affect personal income. In addition, differences between different occupations are also investigated.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"515-544"},"PeriodicalIF":0.8,"publicationDate":"2017-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48743096","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-12-08DOI: 10.3868/s060-006-017-0025-1
Y. Ng, Suthathip Yaisawarng
This paper examines the effects of state-owned enterprises (SOE) privatization, implemented by the Chinese government in the 1990s, on enterprise efficiency for a sample of non-privatized SOEs and privatized ex-SOEs. The study calculates input-oriented DEA meta-frontier efficiency scores, after accounting for heterogeneity in technology across groups. These scores are used to test whether or not one groupi¯s technology dominates the other. A measure of additional input saving is also provided if these enterprises have access to unrestricted meta-technology. The analysis of the Chinese pharmaceutical industry reveals that privatization has not improved enterprise efficiency, at least in the short run. Almost 56% of inputs could be proportionally saved if these privatized ex-SOEs had been efficient, relative to the meta-production technology while non-privatized SOEs could proportionally save only 51%. Privatized ex-SOEs had less ability to access to meta-technology. This finding could be explained by subsequent observations that China, at the time of our analysis, did not have well-established intellectual property rights and formal drug approval procedures; these two factors are important driving forces for developing joint ventures with foreign investors to gain additional capital funding and technology transfer. Broadly speaking, our results are consistent with the subsequent shakeup in the Chinese pharmaceutical industry.
{"title":"Can a Government Initiate Enterprise Reform to Improve Efficiency? A Cross-Section Analysis of the Chinese Pharmaceutical Industry","authors":"Y. Ng, Suthathip Yaisawarng","doi":"10.3868/s060-006-017-0025-1","DOIUrl":"https://doi.org/10.3868/s060-006-017-0025-1","url":null,"abstract":"This paper examines the effects of state-owned enterprises (SOE) privatization, implemented by the Chinese government in the 1990s, on enterprise efficiency for a sample of non-privatized SOEs and privatized ex-SOEs. The study calculates input-oriented DEA meta-frontier efficiency scores, after accounting for heterogeneity in technology across groups. These scores are used to test whether or not one groupi¯s technology dominates the other. A measure of additional input saving is also provided if these enterprises have access to unrestricted meta-technology. The analysis of the Chinese pharmaceutical industry reveals that privatization has not improved enterprise efficiency, at least in the short run. Almost 56% of inputs could be proportionally saved if these privatized ex-SOEs had been efficient, relative to the meta-production technology while non-privatized SOEs could proportionally save only 51%. Privatized ex-SOEs had less ability to access to meta-technology. This finding could be explained by subsequent observations that China, at the time of our analysis, did not have well-established intellectual property rights and formal drug approval procedures; these two factors are important driving forces for developing joint ventures with foreign investors to gain additional capital funding and technology transfer. Broadly speaking, our results are consistent with the subsequent shakeup in the Chinese pharmaceutical industry.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"607-634"},"PeriodicalIF":0.8,"publicationDate":"2017-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43953574","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-09-19DOI: 10.3868/S060-006-017-0019-2
Zhiqi Chen
By means of a literature review, this paper strives to provide some clarity on the much-debated relationship between product market competition and firmsi¯ incentives to innovate. It shows that in the literature there does not exist a robust relationship between competition and incentives to innovate. Therefore, it would be futile to continue the debate over whether competition stimulates or hinders innovation. A more useful approach is to make a distinction between pre-innovation competition and post-innovation competition, as it provides a way for reconciling many of the seemingly contradictory findings from the literature. Another important insight from the literature is that the relationship between competition and innovation depends on the source of increased competition.
{"title":"Product Market Competition and Innovation: What Can We Learn from Economic Theory?","authors":"Zhiqi Chen","doi":"10.3868/S060-006-017-0019-2","DOIUrl":"https://doi.org/10.3868/S060-006-017-0019-2","url":null,"abstract":"By means of a literature review, this paper strives to provide some clarity on the much-debated relationship between product market competition and firmsi¯ incentives to innovate. It shows that in the literature there does not exist a robust relationship between competition and incentives to innovate. Therefore, it would be futile to continue the debate over whether competition stimulates or hinders innovation. A more useful approach is to make a distinction between pre-innovation competition and post-innovation competition, as it provides a way for reconciling many of the seemingly contradictory findings from the literature. Another important insight from the literature is that the relationship between competition and innovation depends on the source of increased competition.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"450-464"},"PeriodicalIF":0.8,"publicationDate":"2017-09-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46911034","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-09-19DOI: 10.3868/S060-006-017-0021-3
S. Caprice
This article examines (i) how retailers position private label products, (ii) why private labels are sold in some product categories but not in others, and why some national brand products may have difficulty in accessing retailers' shelves, (iii) why some private label products are positioned as "premium" brands, and (iv) how consumers' surplus and total welfare are affected by private labels. We find that private label positioning leads to less differentiation in product category, which structurally changes a retailer's product line in return. Consumer welfare and total welfare are lower.
{"title":"Private Label Positioning and Product Line","authors":"S. Caprice","doi":"10.3868/S060-006-017-0021-3","DOIUrl":"https://doi.org/10.3868/S060-006-017-0021-3","url":null,"abstract":"This article examines (i) how retailers position private label products, (ii) why private labels are sold in some product categories but not in others, and why some national brand products may have difficulty in accessing retailers' shelves, (iii) why some private label products are positioned as \"premium\" brands, and (iv) how consumers' surplus and total welfare are affected by private labels. We find that private label positioning leads to less differentiation in product category, which structurally changes a retailer's product line in return. Consumer welfare and total welfare are lower.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"480-513"},"PeriodicalIF":0.8,"publicationDate":"2017-09-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42303276","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-09-19DOI: 10.3868/S060-006-017-0020-6
C. Qin, Dandan Zhu, Shengping Zhang
A network approach is proposed to analyze the formation of cross-holdings and anti-competitive implications. Our approach is motivated by the bilateral arrangement of passive ownership between Microsoft and Apple in 1997. We provide a complete characterization of pairwise stable cross-holdings for a model of Cournot oligopoly with a homogeneous product. Our results strengthen the competitive implications of endogenous cross-holdings in Cournot oligopoly found in the literature.
{"title":"A Model of Endogenous Cross-Holdings in Oligopoly","authors":"C. Qin, Dandan Zhu, Shengping Zhang","doi":"10.3868/S060-006-017-0020-6","DOIUrl":"https://doi.org/10.3868/S060-006-017-0020-6","url":null,"abstract":"A network approach is proposed to analyze the formation of cross-holdings and anti-competitive implications. Our approach is motivated by the bilateral arrangement of passive ownership between Microsoft and Apple in 1997. We provide a complete characterization of pairwise stable cross-holdings for a model of Cournot oligopoly with a homogeneous product. Our results strengthen the competitive implications of endogenous cross-holdings in Cournot oligopoly found in the literature.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"465-479"},"PeriodicalIF":0.8,"publicationDate":"2017-09-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47401835","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-09-19DOI: 10.3868/s060-006-017-0017-8
Yinxing Hong, Yao Lu, Jianghuai Zheng
In light of the relationship and the current disconnection between science & technology (ST rather it is about the coordination of the functions of cultivation and development in new industries, new technologies, and new talents of industrialized innovation. The incentive mechanism for industrialized innovation should motivate not only innovation but also coordination. Technology entrepreneurship is the industrialization of new technology through business start-ups, which occurs beyond the stage of incubation and development of new technology. The capital of technology entrepreneurship is the set consisting of knowledge capital manifested through technological innovation, human capital manifested through entrepreneurs, and physical capital in the form of venture capital. While physical capital is indispensable, knowledge capital and human capital play the decisive role in technology entrepreneurship. The industrialization of technological innovation involves two requirements: one is to enable the new technology industry to achieve a large scale rapidly, and the other is to fully realize the potential value of the new technology. Both requirements are reliant on effective innovation in business models.
{"title":"Industrialized Innovation: The Connection of Science & Technology Innovation with Industrial Innovation","authors":"Yinxing Hong, Yao Lu, Jianghuai Zheng","doi":"10.3868/s060-006-017-0017-8","DOIUrl":"https://doi.org/10.3868/s060-006-017-0017-8","url":null,"abstract":"In light of the relationship and the current disconnection between science & technology (ST rather it is about the coordination of the functions of cultivation and development in new industries, new technologies, and new talents of industrialized innovation. The incentive mechanism for industrialized innovation should motivate not only innovation but also coordination. Technology entrepreneurship is the industrialization of new technology through business start-ups, which occurs beyond the stage of incubation and development of new technology. The capital of technology entrepreneurship is the set consisting of knowledge capital manifested through technological innovation, human capital manifested through entrepreneurs, and physical capital in the form of venture capital. While physical capital is indispensable, knowledge capital and human capital play the decisive role in technology entrepreneurship. The industrialization of technological innovation involves two requirements: one is to enable the new technology industry to achieve a large scale rapidly, and the other is to fully realize the potential value of the new technology. Both requirements are reliant on effective innovation in business models.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"400-417"},"PeriodicalIF":0.8,"publicationDate":"2017-09-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45326376","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-09-19DOI: 10.3868/S060-006-017-0015-4
Huagang Li, G. Tan
In this paper, we provide an alternative explanation for why auctioneers often keep the reserve price hidden or secret. We consider a standard independent private values environment in which the buyers are risk-averse and the seller has private information about her valuation of the object to be auctioned. The seller uses a first-price sealed-bid auction mechanism combined with either an announced reserve price or a hidden reserve price. We compare the selleri¯s ex ante expected profits under these two policies and find that the optimal hidden reserve price policy generates higher expected profits for the seller when the buyers are fairly risk-averse under particular restrictions on buyersi¯ preferences and the distributions of private values. As the number of the buyers increases, the hidden reserve price is more likely to dominate. Numerical methods are used to demonstrate the generality of our main results.
{"title":"Hidden Reserve Prices with Risk-Averse Bidders","authors":"Huagang Li, G. Tan","doi":"10.3868/S060-006-017-0015-4","DOIUrl":"https://doi.org/10.3868/S060-006-017-0015-4","url":null,"abstract":"In this paper, we provide an alternative explanation for why auctioneers often keep the reserve price hidden or secret. We consider a standard independent private values environment in which the buyers are risk-averse and the seller has private information about her valuation of the object to be auctioned. The seller uses a first-price sealed-bid auction mechanism combined with either an announced reserve price or a hidden reserve price. We compare the selleri¯s ex ante expected profits under these two policies and find that the optimal hidden reserve price policy generates higher expected profits for the seller when the buyers are fairly risk-averse under particular restrictions on buyersi¯ preferences and the distributions of private values. As the number of the buyers increases, the hidden reserve price is more likely to dominate. Numerical methods are used to demonstrate the generality of our main results.","PeriodicalId":44830,"journal":{"name":"Frontiers of Economics in China","volume":"12 1","pages":"341-370"},"PeriodicalIF":0.8,"publicationDate":"2017-09-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43923097","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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