Journal of Asian Economics最新文献

Pesticides are important agricultural inputs, which can effectively reduce crop growth risk, but irrational use of pesticides also brings major challenges to the green development of agriculture. This paper constructs a theoretical framework of the effect of crop insurance on pesticides usage. Then using family farm survey data in East China, we measure the marginal value cost ratio (MVCR) of pesticides use through the improved damage abatement production function (DAPF), and empirically analyze the impact of crop insurance on MVCR of pesticides use by employing the endogenous treatment effect model (ETEM). The results show that 42.6% of family farms in the sample area purchased crop insurance, and almost all family farms overused pesticides, but the degree was relatively lower among the family farms with crop insurance. Crop insurance has a significantly positive effect on the MVCR of pesticides use, which indicates that it can optimize farmers’ pesticides use behavior. This conclusion is also confirmed by several robustness checks. Thus, the promotion of agricultural insurance can play the role of promoting the green development of agriculture to a certain extent.

As the pursuit of sustainable development goals has become an increasingly prominent component of urban governance in recent years, compliance with sustainability agendas is now an essential consideration in public investment decisions. Although government spending on the construction of intelligent buildings can help the government achieve its sustainability objectives, steady funding for these projects may not be possible during budget cuts. Demonstrating the added benefits of sustainability-focused, government-funded construction projects can help to justify budgeting for intelligent buildings. This paper explores the externalities of a community sports center constructed to intelligent building specifications in New Taipei City, Taiwan, measured by the willingness to pay for proximal residence and accessibility to the community sports center. By comparing this smart community sports center with one designed and constructed along traditional lines, the paper finds that the effect of positive externalities is more significant in the community sports center housed in intelligent buildings. The paper highlights the importance of community sports centers by showing the price premiums for houses near them. It indicates that directing public investment toward sustainable public infrastructure will likely provide added benefits. The evidence provides support for emerging markets to propose policies that are consistent with sustainability goals.

Facing the challenge of population aging and labor force shrinking, the Chinese government has been trying to reform its family planning policy since 2015. This paper analyzes the impacts of China’s Two-child policy on economic growth and industrial structure from 2020 to 2060 using a dynamic Computable general equilibrium (CGE) model. This paper constructs an effective labor input index accounting for changes in educational attainment and labor force participation rates by age and sex to simulate the effects of the demographic changes on labor supply and economic growth, rather than using simple working-age measures. This paper sets two policy scenarios, the One-child policy and the Two-child policy, to simulate the changes in the employment structure, industrial structure, and main macroeconomic indicators under different population policies. The main finding is that under the Two-child policy, the average GDP growth rate is expected to be 0.3% and 1.0% points higher than the One-child policy in the period of 2015–2030, and 2045–2060; the employment growth rates of the manufacturing and service industries are higher than that under the One-child policy; the shift of industrial structure from manufacturing to service industry will be slightly slower than the One-child policy. The positive impacts of the Two-child policy on China’s economic growth are not significant in the short run. From the perspective of the quantity, structure and quality of labor supply, this paper reveals how a more relaxed family planning policy will affect labor supply, and ultimately affect economic structure and growth in a long run.

The macro-finance literature provides conflicting views on how movements in housing price affect firms’ capital spending or R&D. We further explore this issue by analyzing a comprehensive international firm-level data set. We use the housing price component independent of firms’ investment opportunities and credit supply shocks. The results support the collateral channel as housing price and firm investment exhibit a positive relationship. This collateral channel is more distinct for capital expenditure than R&D, and in housing downturns when firms’ credit constraints bind. Nevertheless, housing appreciations are negatively associated with R&D and large housing booms are also detrimental to capital investment, which suggests a possible resource reallocation from the production sector to the housing sector during those phases. Small firms and firms with stronger investment opportunities respond more sensitively to housing price. Countries that rely more on bank financing and collateralized lending display a larger collateral effect in capital expenditure.

A neutral interest rate is a key indicator of the monetary policy stance. This study estimates South Korea’s neutral interest rates and their determinants. Based on the results, we investigate the prior monetary policy patterns of the Bank of Korea (BOK) and evaluate its stance. We adopted a time-series model approach, with a Bayesian econometric strategy. We can summarize the empirical findings as follows. First, the neutral interest rate has continued to fall, and it tends to fall sharply during downturns, such as the global financial crisis and COVID-19 pandemic. Second, the fall over the past two decades is largely attributable to population aging and the neutral US interest rate. Meanwhile, the recent rebound in the neutral interest rate seems to be due to the increase in the net issuance of government bonds. Finally, the BOK responded substantially to aggregate demand shocks over recent decades. In particular, the BOK’s current monetary policy stance is contractionary because of its active response to inflation rather than real activity.

Unraveling the long shadow of historical natural disasters, this study explores how the Yellow River floods shape enterprise fixed asset investments in an institutional and cultural context. Leveraging the regression discontinuity approach, we uncover a significant negative impact of these floods on investments, primarily due to weakened property rights and increased reliance on religious coping mechanisms. Further analysis suggests that the enduring impact of floods on investment persists even after controlling for confounding short-term natural disasters, financial development level, and the Tangshan Earthquake. In addition, the impact of historical Yellow River flood arises from cumulative consequences, rather than individual flood outcomes. Overall, this study not only sheds light on the dynamics between historical natural disasters and enterprise economic behavior, but also contributes to a deeper understanding regarding the broader, long-term economic impacts of climate change.

This paper develops a parsimonious model of incomplete credit and job markets in which family background helps children invest in education and land jobs. As some competent children lacking in social connections are shut out of good jobs, both their incentives and accessibility in investing in education reduce. The transition process to value more on education rather than family background is associated with higher relative mobility, upward mobility, and mobility expectations. To promote intergenerational mobility in developing countries, the reformation of the job market may be another key area besides providing more education opportunities for deprived children. Some evidence from China supports the theoretical model.

This paper investigates the effects of processing export on firms’ social security contributions. A consistent pattern emerges that processing exporters in China exhibit higher actual contributions relative to ordinary exporters. This finding is intriguing, as processing exporters have been found to be inferior on various margins, such as wages and productivity. We propose and test a potential mechanism from a labor standard perspective, supply chain pressure, where processing exporters are compelled by downstream importers to adhere to certain codes of conduct in order to avoid reputation damages. We discuss endogeneity problems arising from various sources that may affect the validity of the proposed mechanism, and adopt instrumental variable estimation to address any unobserved concerns. Moreover, despite the unquantifiability of supply chain pressure, supportive evidence is found as pure-assemblers, processing exporters in high-exposure industries, those with destinations in developed countries and those in export-intensive regions exhibit relatively higher contributions, as predicted by the theory. These findings also negate competing hypotheses from the traditional labor cost perspective. Furthermore, non-state-owned, small, and low-paying firms are more susceptible to supply chain pressure than their respective counterparts. Our findings contribute to a better understanding of the behavioral differences between processing and ordinary exporters.

The business environment is the foundation for the survival and development of market entities, and the choice of entry mode of outward foreign direct investment (OFDI) is an important strategic decision for the OFDI behavior of market entities. Studying the relationship between the business environment and the OFDI entry mode of enterprises is one of the essential contents to stimulate the vitality of market entities and promote economic circulation. Based on the data from the World Bank’s Doing Business Database and China’s OFDI events from 2010 to 2019, this paper examines the impact of the business environment on enterprises’ OFDI entry mode choices from varying perspectives, such as enterprises’ different life cycles, heterogeneous investment motivations, and the Belt and Road Initiative (BRI). The result shows that the business environment is an essential factor affecting the choice of OFDI mode. The better the business environment in the host country, the more favorable it will be for Chinese enterprises to choose cross-border mergers and acquisitions (M&A). Different investment motivations and the BRI have a moderating effect on enterprises’ OFDI entry mode choice. An improved business environment makes it easier for companies to boost cross-border M&A in developing countries than in developed ones. “Starting a business” and “trading across borders” will have a positive impact on cross-border M&A, and “getting credit” will encourage enterprises to choose the OFDI mode of greenfield investments.

Household size in rural China has seen a shrinking trend in the past decades. This has been attributed to the one-child policy, low fertility rates, and population migration under rapid urbanization. This paper suggests that the gender imbalance in the marriage market has improved the bargaining power of wives, which has led them to divide up the family and live apart from their parents-in-law. This trend has improved the share of doubleton families and decreased the size of households in rural China. Employing nationally representative survey data, empirical evidence indicates that the gender imbalance has significant positive effects on the probability of married women living apart from parents-in-law. This effect is stronger in rural China than in urban China. This paper sheds light on the driving forces of shrinking household size in rural China and has important implications for future family policies such as supporting the elderly in rural China.