Pub Date : 2025-11-20DOI: 10.1016/j.chieco.2025.102600
Juhui Chen , Junfei Bai , Xi Lu , Yinghui Ma , Meng Zhou
Text-based pesticide labels have been widely proven to be dysfunctional in guiding and educating farmers on the proper use of pesticides in many developing countries. The existing studies, however, fail to explore more economically effective approaches for activating label information content. In this study, through a well-designed lab-in-the-field experiment, we propose and empirically verify that an audiovisual label affixed with a QR code encoded with a pesticide operation video can significantly reduce the overuse of pesticides by approximately 15% on average and improve dosage accuracy. Audiovisual labels not only decrease pesticide use among farmers already using labels but also encourage more farmers to follow label instructions, broadening the reduction in pesticide usage. The stronger effects are observed among farmers who distrust retailers but trust labels, as well as among those with relatively higher levels of education, suggesting that trust and education jointly shape the effectiveness of audiovisual labels.
{"title":"Audiovisual pesticide label: A digital expert to promote accurate pesticide use","authors":"Juhui Chen , Junfei Bai , Xi Lu , Yinghui Ma , Meng Zhou","doi":"10.1016/j.chieco.2025.102600","DOIUrl":"10.1016/j.chieco.2025.102600","url":null,"abstract":"<div><div>Text-based pesticide labels have been widely proven to be dysfunctional in guiding and educating farmers on the proper use of pesticides in many developing countries. The existing studies, however, fail to explore more economically effective approaches for activating label information content. In this study, through a well-designed lab-in-the-field experiment, we propose and empirically verify that an audiovisual label affixed with a QR code encoded with a pesticide operation video can significantly reduce the overuse of pesticides by approximately 15% on average and improve dosage accuracy. Audiovisual labels not only decrease pesticide use among farmers already using labels but also encourage more farmers to follow label instructions, broadening the reduction in pesticide usage. The stronger effects are observed among farmers who distrust retailers but trust labels, as well as among those with relatively higher levels of education, suggesting that trust and education jointly shape the effectiveness of audiovisual labels.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102600"},"PeriodicalIF":5.5,"publicationDate":"2025-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145617081","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-19DOI: 10.1016/j.chieco.2025.102602
Yi Jiang , Zelong Tan , Ge Yang
The study examines the impact of a widely adopted contractual mechanism between entrepreneurs and venture capitalists (VCs)—the valuation adjustment mechanism (VAM)—on firm performance. We find that VAM agreements lead to a significant decline in firms' profitability. This effect is concentrated in firms that are imposed by accounting targets, especially annual performance targets in VAMs. The adverse impact of VAMs diminishes when firms are backed by more experienced VCs or when VCs hold a larger equity stake. In addition, we also document that the detrimental effect of VAMs is attributable to firms without any independent director. Our finding reveals that the decline in profitability is driven by aggressive expansion strategies, which increase both revenue and cost of goods sold, while diminishing gross profit margins. Moreover, firms with VAMs also cut R&D expenditures and are more likely to delist from the NTB in the long-run. Overall, our results suggest that VAMs exert significant short-term pressure on entrepreneurs and they have to use short-term-oriented expansion strategies that harm profitability and long-term sales growth. Our findings hold up to a battery of endogeneity tests and robustness checks, including the use of parallel trend assumption test, instrumental variables, propensity score matching, stacked DiD, and different sample periods.
{"title":"Valuation adjustment mechanisms in venture capital and entrepreneurial firms' performance","authors":"Yi Jiang , Zelong Tan , Ge Yang","doi":"10.1016/j.chieco.2025.102602","DOIUrl":"10.1016/j.chieco.2025.102602","url":null,"abstract":"<div><div>The study examines the impact of a widely adopted contractual mechanism between entrepreneurs and venture capitalists (VCs)—the valuation adjustment mechanism (VAM)—on firm performance. We find that VAM agreements lead to a significant decline in firms' profitability. This effect is concentrated in firms that are imposed by accounting targets, especially annual performance targets in VAMs. The adverse impact of VAMs diminishes when firms are backed by more experienced VCs or when VCs hold a larger equity stake. In addition, we also document that the detrimental effect of VAMs is attributable to firms without any independent director. Our finding reveals that the decline in profitability is driven by aggressive expansion strategies, which increase both revenue and cost of goods sold, while diminishing gross profit margins. Moreover, firms with VAMs also cut R&D expenditures and are more likely to delist from the NTB in the long-run. Overall, our results suggest that VAMs exert significant short-term pressure on entrepreneurs and they have to use short-term-oriented expansion strategies that harm profitability and long-term sales growth. Our findings hold up to a battery of endogeneity tests and robustness checks, including the use of parallel trend assumption test, instrumental variables, propensity score matching, stacked DiD, and different sample periods.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102602"},"PeriodicalIF":5.5,"publicationDate":"2025-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145839893","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-17DOI: 10.1016/j.chieco.2025.102593
Xuanyu Zhang, Xiaoyun Fan
A recent Chinese household survey shows heterogeneous debt-to-income ratio (DIR) and debt-to-asset ratio (DAR). We analyze the cyclicality and time-lag properties of debt increment with respect to consumption and asset accumulation using econometric methods, and examine the effect of debt on wealth distribution in China by applying heterogeneous asset grids and idiosyncratic returns. The Hamilton–Jacobi–Bellman problem solved with interpolation and nested-drift approaches suggests that debt relaxes the budget constraint but hinders asset accumulation among low-income/asset households, and the Gini index increases by around 0.11 in the presence of debt increment. We further demonstrate that the indirect effect of monetary policy via assets accounts for up to 20 percent of the total effect for households with high wealth endowments. However, the high DIR and DAR prevent the compensation of the indirect effect on output growth and consumption for households with low endowments, thereby decreasing the effectiveness of standard monetary policy.
{"title":"The impact of household debt on the wealth distribution and inequality in China","authors":"Xuanyu Zhang, Xiaoyun Fan","doi":"10.1016/j.chieco.2025.102593","DOIUrl":"10.1016/j.chieco.2025.102593","url":null,"abstract":"<div><div>A recent Chinese household survey shows heterogeneous debt-to-income ratio (DIR) and debt-to-asset ratio (DAR). We analyze the cyclicality and time-lag properties of debt increment with respect to consumption and asset accumulation using econometric methods, and examine the effect of debt on wealth distribution in China by applying heterogeneous asset grids and idiosyncratic returns. The Hamilton–Jacobi–Bellman problem solved with interpolation and nested-drift approaches suggests that debt relaxes the budget constraint but hinders asset accumulation among low-income/asset households, and the Gini index increases by around 0.11 in the presence of debt increment. We further demonstrate that the indirect effect of monetary policy via assets accounts for up to 20 percent of the total effect for households with high wealth endowments. However, the high DIR and DAR prevent the compensation of the indirect effect on output growth and consumption for households with low endowments, thereby decreasing the effectiveness of standard monetary policy.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102593"},"PeriodicalIF":5.5,"publicationDate":"2025-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145568497","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-17DOI: 10.1016/j.chieco.2025.102601
Xiao Deng , Shi-Ting He , Xinrui Lin , Junjie Tang
Successful innovations not only hinge on the firm's internal characteristics, but also closely relate to its involvement in supply networks. Unlike most previous studies that focus on the ego network surrounding a focal firm, our study expands the view to the entire nationwide supply network and investigates how a firm's network centrality facilitates its innovations. Leveraging a novel dataset on inter-firm relationships, we trace the evolution of the supply network among Chinese firms from 2007 to 2021. Our analysis demonstrates that firms with higher network centrality tend to devote more efforts to innovation and acquire more innovation outputs. Centrally positioned firms enjoy enhanced access to external financing and valuable information sharing. These advantages have contributed to the recent increase in internal innovation efforts by Chinese firms to mitigate the impact of U.S. economic sanctions.
{"title":"Supply network and firm innovation: Evidence from China","authors":"Xiao Deng , Shi-Ting He , Xinrui Lin , Junjie Tang","doi":"10.1016/j.chieco.2025.102601","DOIUrl":"10.1016/j.chieco.2025.102601","url":null,"abstract":"<div><div>Successful innovations not only hinge on the firm's internal characteristics, but also closely relate to its involvement in supply networks. Unlike most previous studies that focus on the ego network surrounding a focal firm, our study expands the view to the entire nationwide supply network and investigates how a firm's network centrality facilitates its innovations. Leveraging a novel dataset on inter-firm relationships, we trace the evolution of the supply network among Chinese firms from 2007 to 2021. Our analysis demonstrates that firms with higher network centrality tend to devote more efforts to innovation and acquire more innovation outputs. Centrally positioned firms enjoy enhanced access to external financing and valuable information sharing. These advantages have contributed to the recent increase in internal innovation efforts by Chinese firms to mitigate the impact of U.S. economic sanctions.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102601"},"PeriodicalIF":5.5,"publicationDate":"2025-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145617082","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-16DOI: 10.1016/j.chieco.2025.102599
Qing He , Bailin Liang , Ce Zhang
Analyzing data from 3616 Chinese listed firms, we find a strong positive relationship between policy uncertainty and firms' exchange rate exposure. This result remains robust after controlling for macroeconomic conditions and addressing endogeneity issues. Notably, policy uncertainty's impact is significantly stronger for firms with a higher degree of international involvement and for poorly-governed firms. Interestingly, firms use financial hedging more intensively and reduce their operational hedging in high-uncertainty periods. Our results suggest that policy uncertainty exacerbates the impact of currency movements on firms' financial performance, as firms become increasingly involved in international operations. Consequently, firms should strengthen their corporate governance and make effective use of hedging tools.
{"title":"Does policy uncertainty affect firms' exchange rate exposure? Evidence from China1","authors":"Qing He , Bailin Liang , Ce Zhang","doi":"10.1016/j.chieco.2025.102599","DOIUrl":"10.1016/j.chieco.2025.102599","url":null,"abstract":"<div><div>Analyzing data from 3616 Chinese listed firms, we find a strong positive relationship between policy uncertainty and firms' exchange rate exposure. This result remains robust after controlling for macroeconomic conditions and addressing endogeneity issues. Notably, policy uncertainty's impact is significantly stronger for firms with a higher degree of international involvement and for poorly-governed firms. Interestingly, firms use financial hedging more intensively and reduce their operational hedging in high-uncertainty periods. Our results suggest that policy uncertainty exacerbates the impact of currency movements on firms' financial performance, as firms become increasingly involved in international operations. Consequently, firms should strengthen their corporate governance and make effective use of hedging tools.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102599"},"PeriodicalIF":5.5,"publicationDate":"2025-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145594642","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-16DOI: 10.1016/j.chieco.2025.102598
Shuai Zhao, Linke Hou
In this paper, we investigate the relationship between clans as informal institutions and upward intergenerational transmission of human capital. Using detailed father-child pairs from China, we find individuals residing in areas with stronger clans have higher probability for moving upward the social ladder. A one standard deviation increase in the number of genealogies per 10,000 people (logged) could raise the probability for moving upward the social ladder by 2.26 %. The results are further confirmed by using the distance of each prefecture's centroid to the nearest Zhu Xi academy in the Song Dynasty as an instrumental variable. In addition, informal financing within clans, legacy of prioritizing education and extensive networks of social connections based on kinship networks are three main mechanisms. Finally, daughters who lack financial investment with their schooling and job prospects in small families are more likely to benefit more from resource pooling services within clans, thereby increasing their chances for moving up the social ladder.
{"title":"Climbing the social ladder: Clans and intergenerational mobility in China","authors":"Shuai Zhao, Linke Hou","doi":"10.1016/j.chieco.2025.102598","DOIUrl":"10.1016/j.chieco.2025.102598","url":null,"abstract":"<div><div>In this paper, we investigate the relationship between clans as informal institutions and upward intergenerational transmission of human capital. Using detailed father-child pairs from China, we find individuals residing in areas with stronger clans have higher probability for moving upward the social ladder. A one standard deviation increase in the number of genealogies per 10,000 people (logged) could raise the probability for moving upward the social ladder by 2.26 %. The results are further confirmed by using the distance of each prefecture's centroid to the nearest Zhu Xi academy in the Song Dynasty as an instrumental variable. In addition, informal financing within clans, legacy of prioritizing education and extensive networks of social connections based on kinship networks are three main mechanisms. Finally, daughters who lack financial investment with their schooling and job prospects in small families are more likely to benefit more from resource pooling services within clans, thereby increasing their chances for moving up the social ladder.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102598"},"PeriodicalIF":5.5,"publicationDate":"2025-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145568496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-14DOI: 10.1016/j.chieco.2025.102582
Yawen Gao , Lun Li , Xin Liang
Understanding the marginal propensity to consume (MPC), its heterogeneity among different population groups, and the influence of policy shocks on MPC is crucial for policymakers. This paper addresses these three questions using two datasets: the China Family Panel Studies (CFPS) and the China Household Finance Survey (CHFS). Extending the Euler equation method of Baker (2018), we estimate the MPC for urban residents in China, finding it ranges between 0.130 and 0.144. A comprehensive heterogeneity analysis shows that individuals with lower wealth, married status, poor health, high education, children, non-migrant status, or homeownership tend to have higher MPCs. Using the 2014 Hukou reform as a policy shock, we estimate its impact on the MPC using CHFS. Results from a difference-in-differences analysis reveal that the reform significantly increased the MPC among urban residents. We show that the influx of migrants following the Hukou reform raised urban housing prices, which increased homeowners' debt levels through wealth effects and reduced their liquid assets, ultimately raising their marginal propensity to consume.
{"title":"Measuring MPC heterogeneity in China: Insights from household registration reform","authors":"Yawen Gao , Lun Li , Xin Liang","doi":"10.1016/j.chieco.2025.102582","DOIUrl":"10.1016/j.chieco.2025.102582","url":null,"abstract":"<div><div>Understanding the marginal propensity to consume (MPC), its heterogeneity among different population groups, and the influence of policy shocks on MPC is crucial for policymakers. This paper addresses these three questions using two datasets: the China Family Panel Studies (CFPS) and the China Household Finance Survey (CHFS). Extending the Euler equation method of Baker (2018), we estimate the MPC for urban residents in China, finding it ranges between 0.130 and 0.144. A comprehensive heterogeneity analysis shows that individuals with lower wealth, married status, poor health, high education, children, non-migrant status, or homeownership tend to have higher MPCs. Using the 2014 Hukou reform as a policy shock, we estimate its impact on the MPC using CHFS. Results from a difference-in-differences analysis reveal that the reform significantly increased the MPC among urban residents. We show that the influx of migrants following the Hukou reform raised urban housing prices, which increased homeowners' debt levels through wealth effects and reduced their liquid assets, ultimately raising their marginal propensity to consume.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102582"},"PeriodicalIF":5.5,"publicationDate":"2025-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145568498","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-11DOI: 10.1016/j.chieco.2025.102594
Yan Zhang , Shuang Ma , Ding Li
This study examines an underexplored question of how housing demolitions influence internal labor migration in China amid slowing population growth and growing concern over workforce mobility. Using nationally representative micro-level survey data from 2013 to 2019 and leveraging housing demolition as an exogenous shock, we examine the relationship among demolition, homeownership, and labor migration. We begin by developing a two-stage discrete choice model to analyze household migration decisions, incorporating multiple dimensions, such as social network dependence, transaction costs, and emotional attachment. Our findings reveal that housing demolition significantly reduces the homeownership rate by 4.6 percentage points and increases the probability of urban registered labor outflow from counties by 7.4 percentage points. Importantly, these effects extend to both intra-provincial and inter-provincial flows, highlighting the role of demolition in reshaping the spatial distribution of labor. Mechanism analysis indicates a dynamic process: in the short term, demolition weakens households' attachment to housing, reducing the housing lock-in effect, while in the long term, compensation creates a wealth effect that alters household assets and influences migration decisions. Heterogeneity analysis further shows that demolition disproportionately constrains younger and lower-income households with fewer assets, underscoring unequal adaptability to forced relocation.
{"title":"Demolition, housing lock-in, and labor migration","authors":"Yan Zhang , Shuang Ma , Ding Li","doi":"10.1016/j.chieco.2025.102594","DOIUrl":"10.1016/j.chieco.2025.102594","url":null,"abstract":"<div><div>This study examines an underexplored question of how housing demolitions influence internal labor migration in China amid slowing population growth and growing concern over workforce mobility. Using nationally representative micro-level survey data from 2013 to 2019 and leveraging housing demolition as an exogenous shock, we examine the relationship among demolition, homeownership, and labor migration. We begin by developing a two-stage discrete choice model to analyze household migration decisions, incorporating multiple dimensions, such as social network dependence, transaction costs, and emotional attachment. Our findings reveal that housing demolition significantly reduces the homeownership rate by 4.6 percentage points and increases the probability of urban registered labor outflow from counties by 7.4 percentage points. Importantly, these effects extend to both intra-provincial and inter-provincial flows, highlighting the role of demolition in reshaping the spatial distribution of labor. Mechanism analysis indicates a dynamic process: in the short term, demolition weakens households' attachment to housing, reducing the housing lock-in effect, while in the long term, compensation creates a wealth effect that alters household assets and influences migration decisions. Heterogeneity analysis further shows that demolition disproportionately constrains younger and lower-income households with fewer assets, underscoring unequal adaptability to forced relocation.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102594"},"PeriodicalIF":5.5,"publicationDate":"2025-11-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145519407","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-10DOI: 10.1016/j.chieco.2025.102596
Yong Li , Kun Mao , Hongwu Gan , Yang Zhou
This study examines how climate risk shapes household portfolio choice, addressing a gap in the household-finance literature that largely overlooks environmental factors. Prior work has emphasized household characteristics and socioeconomic conditions, but the role of physical climate risk remains underexplored. Using five waves (2011–2019) of the China Household Finance Survey (CHFS) matched to county-level meteorological records, we estimate a household-level panel fixed-effects model and implement an instrumental-variables strategy to identify causal effects. We document that extreme heat conditions significantly curtail participation in equity markets and shrink the fraction of household assets allocated to stocks. Our mechanism analysis indicates that climate risk operates by amplifying background risks—specifically labor-income and health risks—and by tightening household credit constraints. These findings illuminate the micro-level channels through which climate risk affects household financial behavior, highlight regressive effects on disadvantaged households, and underscore the need for climate-resilient financial policy.
{"title":"Climate risk and household stock market participation","authors":"Yong Li , Kun Mao , Hongwu Gan , Yang Zhou","doi":"10.1016/j.chieco.2025.102596","DOIUrl":"10.1016/j.chieco.2025.102596","url":null,"abstract":"<div><div>This study examines how climate risk shapes household portfolio choice, addressing a gap in the household-finance literature that largely overlooks environmental factors. Prior work has emphasized household characteristics and socioeconomic conditions, but the role of physical climate risk remains underexplored. Using five waves (2011–2019) of the China Household Finance Survey (CHFS) matched to county-level meteorological records, we estimate a household-level panel fixed-effects model and implement an instrumental-variables strategy to identify causal effects. We document that extreme heat conditions significantly curtail participation in equity markets and shrink the fraction of household assets allocated to stocks. Our mechanism analysis indicates that climate risk operates by amplifying background risks—specifically labor-income and health risks—and by tightening household credit constraints. These findings illuminate the micro-level channels through which climate risk affects household financial behavior, highlight regressive effects on disadvantaged households, and underscore the need for climate-resilient financial policy.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102596"},"PeriodicalIF":5.5,"publicationDate":"2025-11-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145519406","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-09DOI: 10.1016/j.chieco.2025.102592
Liangyuan Chen , Jianhao Lin , Xia Wang , Zixiang Zhu
Unlike central banks in developed economies, the People's Bank of China (PBC) does not explicitly use forward guidance but rather provides explanatory information about monetary policy. The PBC has mainly used quarterly written reports and non-periodic oral channels to communication with the market, but there are significant differences in the institutional objectives and textual structures of these two types of communication. This paper investigates the real effects of the PBC's narrative on the macroeconomy. Our results show that the PBC's policy-related information can also guide inflation expectations and have a direct impact on the macroeconomy. The different macroeconomic effects between oral communication and written communication lies in their differences in timeliness, semantic complexity and ambiguity. Meanwhile, such explanatory communication can help the public understand policy stance, resist the negative impact of economic policy uncertainty, and thereby enhance monetary policy effectiveness. Finally, we find that oral communication has an increasingly significant impact on inflation expectations through variance decomposition.
{"title":"The real effect of China's narrative Central Bank Communication","authors":"Liangyuan Chen , Jianhao Lin , Xia Wang , Zixiang Zhu","doi":"10.1016/j.chieco.2025.102592","DOIUrl":"10.1016/j.chieco.2025.102592","url":null,"abstract":"<div><div>Unlike central banks in developed economies, the People's Bank of China (PBC) does not explicitly use forward guidance but rather provides explanatory information about monetary policy. The PBC has mainly used quarterly written reports and non-periodic oral channels to communication with the market, but there are significant differences in the institutional objectives and textual structures of these two types of communication. This paper investigates the real effects of the PBC's narrative on the macroeconomy. Our results show that the PBC's policy-related information can also guide inflation expectations and have a direct impact on the macroeconomy. The different macroeconomic effects between oral communication and written communication lies in their differences in timeliness, semantic complexity and ambiguity. Meanwhile, such explanatory communication can help the public understand policy stance, resist the negative impact of economic policy uncertainty, and thereby enhance monetary policy effectiveness. Finally, we find that oral communication has an increasingly significant impact on inflation expectations through variance decomposition.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102592"},"PeriodicalIF":5.5,"publicationDate":"2025-11-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145519578","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"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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