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In this paper, we evaluate the role of the high speed railway (HSR) project, one of the largest transportation infrastructure projects in the world, in poverty alleviation in China. This study combines county-level data from the China County Statistical Yearbooks with HSR data from the China Railway Yearbooks. The method of difference-in-differences is applied to examine the HSR connection effect on government expenditure in poverty alleviation across Chinese poverty counties over the period of 2010-2018. The results show that the HSR connection has a significantly positive impact on reducing government expenditure in poverty alleviation. Our results, which are based on alternative measurement of poverty alleviation and possible bias arising from endogeneity issue, are robust. This paper highlights that HSR can help achieve accessibility of rural area and poverty alleviation simultaneously. An understanding of the effect is critical for policymakers to promote intra-regional development, balancing efficiency and regional equality. [ABSTRACT FROM AUTHOR]

More and more Chinese enterprises have participated in the Belt and Road initiative (BRI) since its launch in 2013. However, have they all actually benefited? Which companies otherwise have benefited most from the plan? To answer these questions, this paper analyzes the impact of the BRI on Chinese enterprises. Among several findings, it reveals that the performance of companies remained low even though the initiative policy initially stimulated performance, the performance of enterprises depends on the geographical location of enterprises and that the returns of China's outward foreign direct investment in various industries became more volatile with only the mining industry enjoying better returns. Thus, the paper shows that the BRI offers Chinese enterprises opportunities but also brings challenges for companies to optimize the allocation of their resources and improve the performance of their investments. [ABSTRACT FROM AUTHOR]

This paper extends the literature on economic consequences of corruption. We simultaneously consider corruption's impacts on output, production efficiency, and environmental performance in an eco-efficiency framework. Pollution is considered as undesirable output in the production process. We construct an eco-efficiency measure from a non-oriented data envelopment analysis model that incorporates a non-convex metafrontier, super-efficiency, and undesirable outputs into a directional distance function. By using panel data from 30 Chinese provinces from 1998 to 2016 in a spatial analysis, we find that corruption, measured by filed-cases of corruption-related crimes, has a significantly negative direct impact on eco-efficiency. The regional spillover effect is not significant for provinces in the same geographical region, but is marginally significant for provinces sharing a common border. [ABSTRACT FROM AUTHOR]

This paper aims to explore the relation between international competitiveness and currency internationalization by employing an analytical framework and applying it to RMB internationalization. Our results reaffirm that economic size, financial market development and network externalities are keys in currency internationalization. We also find that international competitiveness is a potential determinant of currency internationalization. However, a more comprehensively and fully measured index of international competitiveness than the GCI is needed to investigate the potential relation between international competitiveness and currency internationalization. The RMB could become an international reserve currency that is larger than the Japanese yen and the British pound sterling, but still lags far behind the US dollar and the euro by 2035. Given the network externalities and historical experience of currency internationalization, however, it will be a long and bumpy process for the RMB to become an international currency, particularly an international reserve currency. Exploring the relation between international competitiveness and currency internationalization; Reaffirming economic size, financial market development and network externalities as keys in currency internationalization; International competitiveness is a potential determinant of currency internationalization; The RMB could become an international reserve currency by 2035; RMB internationalization will be a long and bumpy process. [ABSTRACT FROM AUTHOR]

Migrant workers in China are experiencing social isolation caused by institutional and non-institutional barriers. This paper explores the relationship between social isolation and migrants' smoking behavior as well as gender differences in smoking. Migrants' social isolation is systematically measured from the structural and qualitative perspective. Using the survey data of 2,188 rural-to-urban migrants in China in 2016, the prevalence of smoking among migrants is 38.21%, with 51.70% for males and 4.06% for females. Migrants with social isolation, such as migration instability, lack of ties with family and fellow migrants, and life dissatisfaction in migrant cities, are more likely to smoke and the impacts vary by gender. The income and price elasticities of cigarette demand show that male migrant smokers are more sensitive to income and price changes than female migrant smokers. Boosting rural migrants' integration into the local community will reduce smoking prevalence, improving the overall health of the society. [ABSTRACT FROM AUTHOR]

Capital misallocation is a main obstacle to China's economic development. This paper deploys a quasi-natural experiment formed by the 'Revitalization Plan for Ten Industries' (RPTI) and examines the impacts that selective industrial policies have on capital misallocation. It is found that the RPTI significantly exacerbates capital misallocation and that the effect does not disappear when the RPTI ends. Mechanism analysis indicates that the RPTI significantly increases the capital productivity of firm groups with high capital productivity but significantly reduces the capital productivity of firm groups with low capital productivity. This can be further interpreted by a decrease or an increase of inefficient investment and financial constraints faced by the corresponding firm groups. The documented relationship is stronger in state-owned enterprises and in firms located in areas of high marketization. Our findings advance the understanding of governmental policy intervention in developing countries. [ABSTRACT FROM AUTHOR]

This paper empirically investigates the impacts of FDI on operation and innovation performance of China's national high-tech zones by using the SBM-VRS and Tobit model. The results show that in general, FDI promotes the growth of operation performance of high-tech zones, but has no significant effect on their innovation performance, after controlling the characteristics in cities and high-tech zones level. Furtherly, the paper finds that FDI increases per expenditure on R&D activity, but decreases ratio of technical income, which explains why FDI doesn't have significant effect on innovation performance. Different regions make different sense. FDI has significantly positive effect on operation performance of all high-tech zones located on eastern, central and western regions, while FDI only makes a positive effect on innovation performance of those high-tech zones on western and central region. [ABSTRACT FROM AUTHOR]

Based on the data from the 2018 China Family Panel Studies data, this paper examines the effect of non-cognitive abilities on gender wages gap in the Chinese labor market. First, use the least squares regression (OLS) method to estimate and analyze the income effect of gender differences. On this basis, the non-conditional quantile (RIF) model is used to analyze the impact of non-cognitive abilities on the gender wage gap. The study found that non-cognitive abilities promote the increase of gender wages. It can be seen from the regression of RIF that non-cognitive abilities has a greater effect on women's wages than men. According to the decomposition of RIF, in the gender wage gap, non-cognitive abilities helps to alleviate the degree of gender discrimination. [ABSTRACT FROM AUTHOR]

This paper analyzes the impact of economic policy uncertainty on firm performance. Utilizing a news-based index of economic policy uncertainty and firm-level data in China, firm investment, employment, and revenue are found to be negatively associated with policy-related economic uncertainty. This negative relationship is weakened in state-owned enterprises (a fall in investment of 5.61%, employment growth of 0.09%, and sales growth of 0.31%) compared to that of non-state-owned enterprises (a fall in investment of 7.79%, employment growth of 0.14%, and sales growth of 0.34%). We explore several potential explanations and find evidence supporting that economic policy uncertainty reduces the incentives of firms to expand their operation through the mechanism of risk-taking, cash holdings and tax burden. Given this microscopic study on mechanisms, our analysis provides a reference for policy-makers to effectively reduce economic fluctuations. [ABSTRACT FROM AUTHOR]

A number of recent studies have investigated the relationship between bride prices and social development. However, there has been little empirical evidence that bride prices affect household income. Based on a unique set of bride price data from China and data from China's Labour Force Dynamic Survey (CLDS), this paper studies the effect of bride prices on rural household income. The findings show that higher bride prices can significantly reduce rural household income. For income categories, higher bride prices have a significantly negative impact on the agricultural income of rural households, while higher bride prices can boost rural households' remittance income by inducing individuals to work as migrant workers. There is a significant age difference in the impact of rural household income. Finally, the relationship between bride prices and income is an inverted U-shape, and moderate bride prices are conducive to income growth. [ABSTRACT FROM AUTHOR]

Poverty alleviation has attracted extensive attention worldwide. This paper investigated the spatial agglomeration effect and dynamics driving rural education levels (namely, primary education, junior secondary education, and senior secondary education) and rural poverty in 27 provinces of China in 2010-2017. The results of a spatial autoregressive (SAR) model revealed that different education levels have distinct effects on rural poverty, and the impact of compulsory education on rural poverty is greater than that of senior secondary education. We further found that rural poverty in a region is clearly not only internally driven but also impacted by the poverty rate in the surrounding provinces, suggesting that regional poverty alleviation policies should combine regional education differences and learn from poverty alleviation through education experience in surrounding areas. Thus, the findings established in this paper have significant implications for targeted poverty alleviation measures in China by improving education. [ABSTRACT FROM AUTHOR]

In this paper, first, using a dataset for China's financial balance sheets we construct the sector-level macro-financial networks. Second, we analyse the statistical features and the dynamic changes of our macro-financial networks. Third, we conduct financial contagion simulations to identify the specific prominent sectors that can generate potential system-wide losses, and measure the resiliencies of different sectors to sector-specific financial shocks. The results uncover certain crucial propagation and contagion mechanisms of systemic risk in China's macro-financial system. In addition, we find that the statistical features of the networks are closely associated with the losses incurred under the inter-sectoral financial contagion. [ABSTRACT FROM AUTHOR]

Following economic reforms, China has become one of the premiere destinations for foreign capital; however, the benefits of this spectacular growth are not evenly distributed. Since the beginning of the 2000s, the Chinese government has designed and implemented policies to encourage foreign investment in central and western provinces to help decrease the significant distributional differences in regional industrial value-added, with limited success. In contrast to previous literature, this paper uses Panel Least Squares method to analyze empirically the impact of industrial sector FDI on Chinese regional inequality in industrial value-added 2003–2013, using three Chinese regions. The lack of prerequisite institutional structure to aid in FDI absorption affects location choices. Despite government policies to support inland regional economic development, foreign firms still prefer to invest in coastal provinces, further illustrating the effects of regional clusters. [ABSTRACT FROM AUTHOR]

This paper attempts to investigate the opposing trends in Chinese urban and rural household savings rates observed in the micro data during the period 1995-2013. Using the Chinese Household Income Project Survey (CHIPS) data, we find that the average urban household savings rate has consistently risen while the average rural household savings rate has gone the opposite direction during the same period. Using a variant of Deaton-Paxson decomposition analysis, we find that urban and rural households displayed vastly different life-cycle savings rate profiles. Results from the median regression and Oaxaca–Blinder decomposition suggest that the increasing urban savings rate can be explained by the continuously rising household income and increased precautionary savings for health shocks, whereas the shifts in household characteristics examined were not able to account for the decrease in rural household savings rate. The urban-rural savings disparities can be fully explained by the urban-rural income gap. [ABSTRACT FROM AUTHOR]

This paper uses a multi-regime threshold vector autoregressive model to investigate the asymmetric and nonlinear impacts of financial stress on China's real economy in high- and low-stress regimes. Special attention is paid to the reliability of the measures of financial stress and real activities in China. We find that the response of China's real economy to a financial stress shock is bigger in high-stress regimes than in low-stress regimes. The negative response to a positive shock is bigger than the positive response to a negative shock. The response to a positive shock is disproportionately larger when the size of the shock increases, but a negative shock does not have this amplifying effect, indicating the danger of a severe financial crisis and the difficulty to revert its damage to China's real economy [ABSTRACT FROM AUTHOR]

This paper uses the spatial Durbin model to capture horizontal strategic environmental policymaking and their effects on air polluting industrial agglomeration in Chinese prefectures. Using a set of panel data on 276 prefectures from 2003 to 2009 in China, we found strong evidence in favor of the pollution haven hypothesis in China. Moreover, we observed evident spillover effects in environmental regulations at the provincial level but not at the prefectural level. Air polluting industries transferred to their neighbored provinces to avoid harsh environmental regulations when the environmental regulatory stringency of the own province was enhanced. Exploring the heterogeneous impacts of EPAs on air polluting industrial activities, we found that senior EPA staff and those working in higher EPA ranks and Environmental Monitoring Stations played a superior role in implementing environmental regulations. The results are robust to alternative spatial weights, different agglomeration indexes, and the SLX model using the ventilation coefficient as an instrumental variable. [ABSTRACT FROM AUTHOR]

The paper examines the impact of underestimation in financial literacy on financial market participation in the largest emerging market, China. Using 3496 China Family Panel Studies (CFPS) 2014 nationally representative data, we find that underestimation in financial literacy negatively influences respondents' financial market participation, while overestimation has no significant effect on it. The result is robust when alternative measures of underestimation or CFPS 2016 data are used. Moreover, we also find that the impact of underestimation is heterogeneous. It has a greater impact on high-income, risk-taking residents and those living in more economically developed areas, while social interaction can alleviate the negative effect of underestimation. Furthermore, underestimation greatly affects the risky financial market participation, particularly the stock market. Our findings suggest that residents do not only need to have great financial literacy, but also need to have the right perception of it to participate in financial markets. [ABSTRACT FROM AUTHOR]

Using executive resume data of China's listed companies between 2006 and 2016, we investigated the relationship between pay disparities within top management teams (TMT) and firms' innovation performance. Specifically, we assessed two dimensions of pay disparities: vertical pay disparity between CEOs and non-CEO managers, and horizontal pay disparity among non-CEO managers. Considering the difference in regional marketization progress, we also explored the moderating effect of marketization degree on this relation. It is found that: with vertical pay disparity increasing by 1%, firms' innovation performance is improved by 2.3%; with horizontal pay disparity increasing, firms' innovation performance is promoted first and then restrained; higher marketization degree strengthens the incentive effects of both vertical and horizontal pay disparity. But the grouped regression results show that, in state-owned enterprises, horizontal pay disparity is only negatively associated with innovation. The theoretical and practical significance of the research is discussed at the end of the paper. [ABSTRACT FROM AUTHOR]

This research applies the dynamic slack-based measure (DSBM) model to evaluate the dynamic efficiency of manufacturing companies in the long run and uses the Censored Least Absolute Deviations (CLAD) model to analyze the effect of corporate governance on their overall efficiency and the efficiency of each input factor. We find the following main results. First, overall efficiency of the manufacturing industry listed companies is low. 2) Debt efficiency is lower than the efficiency of shareholders' equity and exhibits a downward trend. 3) Labor efficiency is the lowest among all inputs. 4) The efficiency of the medicine and bio-products industry is the highest, while the efficiency of the paper and printing industry (which causes serious pollution) is the lowest. 5) Companies with low export intensity and high capital intensity are the most efficient, while companies with high export intensity and low capital intensity are the least efficient. 6) Ownership concentration and efficiency have a significantly positive U-shape relationship. 7) Board size and efficiency have a significantly inverted U-shape relationship. 8) An actual controller with a state-owned nature has a significantly negative impact on efficiency. 9) Executive compensation, equity incentive, and institutional ownership have a significantly positive impact on efficiency. [ABSTRACT FROM AUTHOR]

Based on China's monthly data from January 2006 to June 2018, this paper uses the symmetric regressive distributed lag model (ARDL) and nonlinear asymmetric regressive distributed lag model (NARDL) to examine the impact of the real interest rate, products' shortage costs and products' selling prices on China's overall inventory investment, and focuses on the asymmetric impact of the three factors on inventory investment. The empirical results show that the real interest rate has a negative impact on inventory investment, and its inhibition effect is stronger than the pulling effect. The products' shortage costs have the positive effect on inventory investment, and the effect of increasing shortage costs are greater than that of decreasing the shortage costs. The products' selling prices are also positively correlated with inventory investment, but the decline of the products' selling prices has the greater impact than the increase of the products' selling prices. [ABSTRACT FROM AUTHOR]

This paper provides evidence about the asset pricing implication of political uncertainty in China. Under the assumption that there is a U-shape relationship between political uncertainty and the duration of Chinese local government leader in office, we propose a novel political uncertainty measure and investigate the impact of such uncertainty on the cross-section of expected stock returns. Using the A-share market data from 1998 to 2017, we find that the firms in the cities with higher political uncertainty tend to earn higher future stock returns, and this positive effect is more pronounced in regions with higher policy-sensitivity. These findings are robust to a battery of tests including using alternative calculation of political uncertainty, changing test horizons, testing in different subperiods and different market states. Further analysis shows that the positive relationship between political uncertainty and expected stock returns is mainly driven by the change in discount rather than change in the firm's fundamentals. [ABSTRACT FROM AUTHOR]

While farmland transfer in rural China has emerged as a critical issue in China's land use policy, there are many unanswered questions about the factors behind ongoing farmland transfer. This study uses survey data from 243 villages in Southwest China to examine how nonfarm employment and large-scale farm enterprises might affect farmland transfer. Specifically, this paper employs a spatial autoregressive (SAR) model with a geographic distance weighting matrix at the village level to explore this effect. Empirical results suggest that the proportion of migrant workers and large-scale farm enterprises positively affects the scale of farmland transfer, while the proportion of local nonfarm workers negatively affects it. By comparing estimation results from the SAR with those from the OLS model, it is found that the OLS model may overestimate the positive impact of migrant workers and underestimate the negative impact of local nonfarm workers on farmland transfer. [ABSTRACT FROM AUTHOR]

This paper explores the relationship between wage increase and innovation and investigates the underlying mechanisms through which wage increase affects innovation. Empirical results, based on the data from 37 two-digit manufacturing industries in China from 2002 to 2019, show that the increases in wages do contribute to innovation in general but their contributions vary across industries and over time. Specifically, the effects of the increasing wages on innovation were insignificant before 2008 but became positively significant after 2008. Moreover, labor productivity acts as a mediating channel between wage increase and innovation while the labor substitution mechanism does not work. The findings in this study offer a new understanding of the effects of the increasing wages on innovation in developing countries. [ABSTRACT FROM AUTHOR]

China's outward FDI reached a peak in 2016, making it as important a foreign investor as Germany, France and the United Kingdom. In this paper, we investigate the main motivations behind Chinese investments in developing countries, Central and Eastern Europe (CEE) in particular. Although the size of Chinese investment in CEE is small, the region is strategic for China as it is a gateway into Western Europe under the Belt Road Initiative. As new or future members of the EU, the CEE countries also provide access to the single market. We find that the motivations to invest in developing countries differ according to regions. Based on outward FDI data provided by the Chinese authorities, the number of Chinese FDI greenfield and M&A projects from Financial Times and Zephyr respectively, as well as face-to-face interviews with companies with investments in CEE, we find that for the case of CEE, domestic markets, access to the larger EU market, strategic assets like technology and prior relationship with the CEE are main reasons for investing. [ABSTRACT FROM AUTHOR]

In order to identify the causes of China's new business cycle patterns, such as an obvious downward shift and reduced fluctuations under the 'New Normal', this paper develops a large-scale dynamic stochastic general equilibrium model as a unified framework for incorporating technology, investment, trade, economic policy and financial volatility. The main conclusions are as follows. First, as to the causes of the downward shift, the current contraction phase of business cycles is mainly due to narrowing economic policy space, decelerating export growth and higher financial volatility. Secondly, as to the contributors to business cycle fluctuations, export growth deceleration is the main contributor to the current contraction phase of business cycles, while financial volatility is very likely to be a key driver of future business cycle fluctuations. Finally, as to China's future business cycle patterns, it tends to fluctuate less considering the effects of numerous temporary shocks have emerged so far. [ABSTRACT FROM AUTHOR]

Neither clear theoretical interpretation nor empirical validation of public educational investment to urban-rural migration or urbanization exists comprehensively. This paper comprehensively analyzes the relationship between public educational investment and urban-rural migration to fill in this niche. We first discuss the theoretical effect of public educational investment and urban-rural migration. Although public educational investment results in distortion and may hinder economic development in the short term, it will still benefit the economy due to its positive long-term impact on human capital. These benefits include a higher level of urban-rural migration and a deepening level of capital accumulation. The empirical evidence using China's data, where we control for confounding factors, take into account endogeneity of public educational investment and investigate the mechanisms behind the relation, confirms our theoretical discussion. This paper is of great significance in understanding China's past process of urban-rural migration. [ABSTRACT FROM AUTHOR]

This paper estimates the short and long-run impact of foreign direct investment, electricity consumption, and real GDP on ecological footprints in the context of environmental Kuznets and Pollution haven hypothesis for China, India, and Pakistan over 1970–2016. Panel and time series models have been adopted in this research. Results of the cointegration test revealed the long-run association among the considered variables. Furthermore, Fully-Modified and Dynamic Ordinary Least Square validated the pollution haven and environmental Kuznets hypothesis for the study area. On the other hand, the linkages between income and ecological footprints have identified U-shaped EKC in the case of China and India. The empirical results of the Dumitrescu and Hurlin panel causality test indicated a unidirectional causality from income to ecological footprints. In contrast, bidirectional causality found between ecological footprints and foreign direct investment and between ecological footprints and electricity consumption. [ABSTRACT FROM AUTHOR]

This paper explores the relationship between various forms of political capital and the private equity placement of publicly listed PSEs. The results show that the political capital of PSEs can significantly affect PEP in the processing time, approval results and scale of financing. Specifically, implicit political capital can significantly shorten the processing time, but cannot significantly affect the approval results; however, both partial state ownership and political participation can significantly increase the approval rating. Moreover, partial state ownership has the most powerful effect on the scale of financing. In addition, the analysis of the impact of different levels of entrepreneurs' political identity on PEP applications reveal that as the level of political identity increases, the PEP approval rate is higher. [ABSTRACT FROM AUTHOR]

This paper, by a case study of Gao Village, examines how two factors, i.e. lineage identity and the reach of the state, impact on local governance in rural China. The paper argues that the withdrawal of the state was detrimental to local governance in the first 20 or so years of post-Mao rural China. With the abolition of agricultural tax and various levies, and the introduction of rural subsidies, rural healthcare and medical care insurances and some investment in rural infrastructure since the beginning of the twenty-first century the return of the state has improved local governance. The paper also argues that the restoration, and in many ways the reinventing, of Chinese tradition of lineage identity makes village elections difficult to be accountable. [ABSTRACT FROM PUBLISHER]

As China's economy enters a new normal, economic growth shifts from factor investment to innovation. The quality of government needs to be improved to create a good environment for the development of innovation and entrepreneurship. This paper uses the CGSS data to empirically study the impact of government quality on the happiness of entrepreneurs. Research shows that the improvement of government quality can significantly improve the self-rated happiness of entrepreneurs, but these three dimensions have different effects, and only the public goods supply index has a significant impact. According to the analysis by region and city level, the government quality has a significant impact on the happiness of entrepreneurs in the less-developed non-eastern and non-provincial cities, but insignificant in the eastern and provincial cities. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of China's arms transfers by focusing on the roles of political factors and energy resource acquisition. Using Stockholm International Peace Research Institute data on China's arms exports during the period from 2001 to 2014, we find that China is likely to sell and transfer more arms to countries with less political freedom and more corrupt or more autocratic countries, implying that political considerations are hidden in arms transfers. The motivation for seeking energy resources is overall supported, suggesting that China's arms transfers are also motived by securing their need for energy and natural resources. That arms trade is a joint decision of both sides implies that political considerations also exist for autocratic regimes or resource-abundant low-income countries to acquire weapons from China. [ABSTRACT FROM AUTHOR]

This paper first constructs a theoretical framework to investigate rural migrants' preference for large cities or small and medium-sized cities as migration destinations. Then, we employ a nested logit model to empirically examine the effects of migration cost and benefit on the probability of migration to different types of cities. Our results suggest that since large cities provide more job opportunities and higher net migration benefit compared with small- and medium-sized cities, rural migrants with relatively high skills are more likely to move to large cities. Although the effects of migration cost and benefit on migration destination decisions are both significant, the effect of migration benefit outweighs that of migration cost. Hence, gaining net migration benefit is the main reason that rural migrants prefer to move to cities, especially to large cities. [ABSTRACT FROM AUTHOR]

Using the data of the China General Social Survey (CGSS) in 2010, the sixth national census in 2010 and the fifth national census in 2000, this paper examines the urban scale's impact on workers' wages by employing instrumental variables method. The study shows that China's large cities with 1–5 million population and megalopolis over 5 million population have significant urban scale wage premium. The living cost difference and agglomeration economy are the main causes of the megalopolis and large cities' wage premium respectively. The high and low skilled workers both benefit from the expansion of urban scale. Policy implications of research findings are that moderate scale cities should be the main direction of Chinese urbanization; big cities should not only absorb high skilled labor, but also be inclusive for low skilled labor; migrant workers' urbanization is conducive to the prosperity of the city. [ABSTRACT FROM AUTHOR]

Since 2004, China has partially liberalized loan rate setting by the banks, but loan rates remain stubbornly within narrow bounds. We argue that competition in the loan market is signalled through the variation of loan deal terms and loan maturity rather than loan rates. We examine the determinants of loan deal conditions in terms of size and maturity. This paper focuses on the role of single firm-bank relationships in determining loan deal conditions as evidence of guanxi in Chinese banking market. Commercial loan deal terms of listed companies are matched to provider banks over the period 1999–2012 and sub-sample estimation for the pre-2004 and post-2004 periods confirm a change in the bank-firm-loan relationship. We find that single firm-bank relationships are associated with larger loan size and longer loan maturity in the pre-liberalization period but that this relationship has weakened in the liberalization period. [ABSTRACT FROM AUTHOR]

China's urbanization in the late twentieth and early twenty-first centuries is a crucial process in transforming the country. Taking advantage of the de facto counts of city population in the last four censuses since 1982, this paper examines the city-size distribution and growth pattern of large cities in China in recent three decades. Combined with earlier data and work on the Mao era, the paper also presents some long-term trends and helps answer an important question: was China successful in controlling the growth of large cities? In addition, the paper analyzes the main features of China's urbanization policy in relation to the political economy and development strategy, and concludes with a discussion of the relevance of this study to the latest urbanization policy and the household registration system or hukou reforms in large cities. [ABSTRACT FROM AUTHOR]

This paper investigates the trends and determinants of geographic concentration and industrial specialization in China, using provincial panel data for the period 1999–2010. It is shown that after 2005, both geographic concentration and industrial specialization began to decline, resulting in an increased similarity of industrial structure among provinces. This paper posits that the industrial policies of the provincial governments are the cause of this phenomenon. The result is robust when using instrumental variables to deal with possible reverse causality. The underlying mechanism is that the policy of the central government, which is set to steer the direction of industrial development for several years to come, is an important reference document for all provincial planners. It therefore causes the less developed regions to deviate from their comparative advantages and results in a combination of insufficient geographic concentration and inverse specialization in China. [ABSTRACT FROM PUBLISHER]

In the Chinese stock market, firms experiencing financial distress have been imposed on a Special Treatment (ST) cap by the China Securities Regulatory Commission. Using a sample of 441 ST firms tracked from 1998 to 2011, this paper employs a Cox proportional hazards model to predict turnaround probability for a distressed firm to remove the ST cap. The predictor variables incorporate (1) accounting-driven ratios, (2) market-driven variables, and (3) information on ownership structure and restructuring status throughout the process. In contrast to previous distress studies, this paper finds that market variables do not add predictive power to the model when combined with accounting variables. Also, incorporating the time effect, the results show that the survivor function for an ST firm's survival is negatively related to the duration, and that the Cox hazards model outperforms the logit model in the out-of-sample forecast. [ABSTRACT FROM PUBLISHER]

On the basis of the role of entrepreneurs in the process of economic development, this paper builds an overlapping generation model to examine the impact of income inequality on economic development from the viewpoint of entrepreneur formation. The results show that in the presence of credit constraints, the impact of income inequality on economic development depends on the stages of development. In the early stages of development, income inequality is beneficial for the formation of entrepreneurs through alleviating the credit constraints. In the later stages of development, however, it is income equality which stimulates the formation of entrepreneurs through alleviating the credit constraints. By the data of China's provinces over the period 2003–2012, this paper estimates the impact of income inequality on the formation of entrepreneurs using the system Generalized Method of Moments approach. The results show that income inequality has a significantly negative impact on the formation of entrepreneurs in both one-step and two-step regressions. [ABSTRACT FROM PUBLISHER]

This paper investigates carbon dioxide (CO2) emission and its determinants in 286 Chinese cities. The findings strongly support an inverted U-shaped relationship between per capita CO2emission (PCE) and urban development. However, the realization of this relationship depends on stringent governmental policy interventions. The regression analysis in this paper shows that city size is positively correlated with CO2emission efficiency, but negatively correlated with PCE. This result suggests that population restrictions in large cities tend to increase CO2emission. It is also shown that regional development programs are likely to encourage economic activities in regions with low CO2emission efficiency and may have significant environmental consequences in the future. [ABSTRACT FROM PUBLISHER]

Using a simultaneous equations model, this paper investigates how/whether the presence of foreign direct investment (FDI) affects the performance of local firms in China's (1) leather shoe manufacturing and (2) textile and garment manufacturing industries. We use the value of sales (total revenue) as a measure of firm performance in domestic and export markets. The distinguishing feature of this paper is the use of an FDI presence measure that takes the regional dimension into account. The empirical analysis presented in this paper reveals that the presence of FDI leads to a significant positive impact on the domestic sales and export intensity of local firms in both industries. This result is found to be robust to alternative measures of FDI. Based on the result, it is recommended that, in order to maximize the benefits from inward FDI, Chinese policy-makers must encourage domestic and foreign-invested firms to locate in close geographical proximity. [ABSTRACT FROM PUBLISHER]

The Chinese political economy is a dynamic entity constituted by multiple developmental trajectories. Recent debates on two seemingly divergent 'models' in the subnational regions of Chongqing and Guangdong have foregrounded the potential contradictions of this dynamism. While existing research has attempted to evaluate these trajectories as outcomes of elite politics or ideological incommensurability, an overlooked but no less important aspect is the connections between these trajectories, Mao-era regulatory policies and the post-1978 system of reciprocal accountability. Synthesizing empirical materials from policy documents, academic commentaries, statistical data and interviews with planners from China, this paper provides a critical evaluation of these connections. [ABSTRACT FROM AUTHOR]

This paper asks if economic growth and steps towards a market economy have affected earnings gaps between the Han and nine large urban ethnic minorities: Zhuang, Hui, Manchurian, Tujia, Uighur, Miao, Tibetan, Mongol and Korean. It also asks how earnings premiums and earnings penalties have changed for the nine ethnic minorities. For the analysis we use a subsample of the 2005 China's Inter-Census Survey. We find examples of three different changes over time in earnings premiums and earnings penalties: One ethnic minority for whom the development has been more favourable than for the Han majority; a second category in which development has been similar; and a third category for which development has been unfavourable. We conclude from the analysis that it can be misleading to infer the experience of one ethnic minority from that of another. [ABSTRACT FROM AUTHOR]

This paper investigates how changes in the structure of household income have affected inequality in urban China during the reform period. We conducted an inequality decomposition analysis by income sources using the household-level data from the Chinese Household Income Project Surveys for 1988, 1995 and 2002. The analysis reveals that the contribution of wages and salaries to inequality has declined over the years. Business income, which served as the inequality enhancing component in 1988, has turned into an inequality reducing force in 1995 and 2002. The marginal analysis reveals that 1% increase in business income neutralises about two-thirds of the increase in inequality caused by an equivalent increase in wages and salaries. Some business issues and policy options are discussed. [ABSTRACT FROM PUBLISHER]

Demographic transition due to population aging is an emerging trend throughout the developing world, and it is especially acute in China, which has undergone demographic transition more rapidly than have most industrial economies. This paper quantifies the distributional effects in the context of demographic transition using an integrated recursive dynamic computable general equilibrium model with top-down behavioral microsimulation. The results of the poverty and inequality index indicate that population aging has a negative impact on the reduction of poverty while its impact is positive with regard to equality. In addition, elderly rural households are experiencing the most serious poverty, and their inequality problems compared with other household groups and within-group inequality worsen with demographic transition. These findings not only advance the previous literature but also deserve particular attention from Chinese policy-makers. [ABSTRACT FROM PUBLISHER]

From the perspective of credit allocation, this paper analyzes the effects of credit market development on the innovative capacities of industrial firms in the People's Republic of China. Using a large dataset of industrial firms in 31 provinces in the People's Republic of China, we find that credit market development enhances the probability of firms' product innovation and innovation outcomes. We further show that firms' credit constraints and firms' performances are two channels through which credit market development affects innovative capacities of firms. Our results are neither driven by the increase in the quantity of credit, nor by the increase in the number of firms in a province. The results are robust to different samples, different estimation methods, and alternative measures of credit market development. [ABSTRACT FROM PUBLISHER]

In 2015, there were more than 20 city clusters in China, designated by the central government. Based on panel data from 283 Chinese cities over the period of 2003–2013, this paper evaluates whether cities within city clusters have higher productivity than those outside the clusters. The empirical results reveal that the city cluster strategy initiated in China's 11th Five-Year Plan has not produced any significant impact on labor productivity, possibly due to market segmentation. However, an exception is the Yangtze River Delta Urban Economic Coordination Committee – the most developed city cluster in China, which has experienced growing productivity improvement. [ABSTRACT FROM PUBLISHER]

This paper studies the impact of migrant children on their parents' occupation choice and wage income using a dataset from a household survey conducted in 2011. We find that the heads of migrant households with school-age children earn significantly less than those who left them at their place of hukou registration. This result holds when we control for personal characteristics, migration duration, origin location, and family structure. Households migrating with school-age children have a higher probability of doing so within the prefecture/province of their hukou registration and are less likely to target coastal regions. After controlling for migration scope and destination location, the presence of children does not influence wages of migrant household heads. We also find that presence of children below age 6 has no impact on the income of migrant household heads. Our results suggest that the hukou system still impedes labor mobility. [ABSTRACT FROM AUTHOR]

The relationship between ownership structure and firm performance in small and medium enterprises (SMEs) in developing and transition countries has been largely ignored. Drawing on endogenous ownership theory, this paper seeks to understand the relationship between ownership structure and firm performance in SMEs in China, which represents an embryonic market environment. Using survey data collected from 189 private firms in Shantou City, China, we find that ownership variables do not have a statistically significant relationship with firm performance. We examine the determinants of changing ownership shares and find that firm size and business instability are related to changes in ownership shares. Our findings provide empirical support for the central tenets of endogenous ownership theory. As such, the results can be interpreted as meaning that even in a developing market environment, such as China, market forces are strong enough to dominate ownership structure change or that the market mechanism is functioning well in some areas of emerging markets. [ABSTRACT FROM AUTHOR]

This paper examines the impact of politically connected CEOs on earnings management in Chinese listed firms. The results show that firms with politically connected CEOs engage in significantly lower levels of accrual-based earnings management than firms without politically connected CEOs. We then find evidence that firms with politically connected CEOs conduct significantly higher levels of real earnings management, which is more difficult to detect than accrual-based earnings management, and that in non-state-controlled firms, where government support is less, the presence of politically connected CEOs is positively related to accruals manipulation. We draw regulators’ attention to the fact that using accrual-based earnings management measures alone may underestimate the earnings management activities of firms with politically connected CEOs. Our findings are robust after controlling for possible endogeneity. [ABSTRACT FROM PUBLISHER]

The aim of this paper is to examine the transitional dynamics of carbon dioxide emission in China by using a prefecture-level database. Convergence analysis is conducted and mobility probability plots (MPPs) are employed to examine the distribution dynamics of 286 cities from 2002 to 2011. The empirical investigation is conducted in three steps. In the first step, the research is carried out at the national level, and it provides an overall view of the evolution of carbon dioxide emission in China. In step two, the database is divided into smaller spatial groupings so as to investigate the relationship between carbon dioxide emission and geographical location. In the third step, the evolution of carbon dioxide emission in the key cities and in other non-key cities is examined, along with its implications for environmental protection. This study offers valuable information on convergence of carbon dioxide emission in China. [ABSTRACT FROM PUBLISHER]