Entrepreneurship,private economy and growth: Evidence from China

This paper examines the impact of entrepreneurship on economic growth by using a panel data set of 29 provinces in China over 20 years. Two indicators of entrepreneurship are defined and introduced into the traditional growth regression framework that is estimated using the system generalized method of moments. We also use the ratio of staff and workers of state-owned enterprises and per capita sown land area as the instrumental variables to identify the causal effect of entrepreneurship on economic growth. Our results suggest that entrepreneurship has a significant positive effect on economic growth and this finding is robust even after we control for other demographic and institutional variables. Our study provides some evidence that may be used as a basis for evaluating the effect of China's policy on private business which has been increasingly relaxed since the late 1970s.     

Effects of Japanese macroeconomic statistic announcements on the dollar/yen exchange rate: High-resolution picture

Using high-frequency transaction data of the actual trading platform, we examine market impact of Japanese macroeconomic statistics news within minutes of their announcements on the dollar/yen exchange rate. Macroeconomic statistics surprises that consistently have significant effect on dollar/yen returns include Tankan (business condition survey conducted by Bank of Japan), GDP, industrial production, price indices and balance of payment. The announcement itself, in addition to the magnitude of the surprise, is found to increase the number of deals and price volatility immediately after the announcement. Most effects, when significant, take place within 30 min of statistics announcements.     

Supply chain trade and technological transfer in the ASEAN + 3 region

This paper analyses how economic integration and the international division of labour have evolved among the ASEAN + 3 countries in the last 20 years. The paper proposes an indicator of the level of technological sophistication based on revealed comparative advantages and uses it to investigate the relation between technological advance, factor endowments and supply chain trade. It is shown that supply chain-trade does not facilitate technological transfer. On the contrary: FDI appears to have significant and negative spill-over effects on technological change. Positive spill-overs from FDI materialize only when host countries have sufficiently high levels of education.     

The Enigmas of TFP in China: A meta-analysis

This paper presents a meta-analysis of 5308 observations of total factor productivity growth (TFPG) in China from 150 primary studies to provide some insightful explanations to the controversies about productivity growth in China in the current literature. The main findings include that (1) the mean TFPG of the aggregate economy at the national level in the current literature is only about 2% after 1978, which barely contributes to 20% economic growth; (2) there are three cycles for TFPG after 1978 and each circle lasts about 10 years; (3) sector-specific TFPGs are generally larger than aggregate economic TFPGs; (4) regional disparities of TFPG are significant and specifically the TFPG in East China is higher than that in Central and West China; (5) TFPG after 1978 is in general greater than that before 1978; and (6) peer-review process and paper languages are significantly correlated with TFPG results.     

Long memory volatility dependency,temporal aggregation and the Korean currency crisis: the role of a high frequency Korean won (KRW)–US dollar ($) exchange rate

Using a new type of 5 min high frequency dataset consisting of real time Korean won (KRW)–US dollar ($) exchange rates, this paper characterizes the volatility process of high frequency returns. The semi-parametric local Whittle estimation is applied to estimate the long memory dependency in the volatility process of the 5 min KRW–$ returns and the temporally aggregated returns data. The estimation results present that the underlying long memory dependency in the volatility process appears to be generally consistent across various temporally aggregated returns and that the exogenous shocks and the multiple breaks associated with the crisis in the market seem to induce greater long memory dependency during the crisis.     

Immigration quotas,World War I,and emigrant flows from the United States in the early 20th century

Little is known about international return migration because governments rarely track out-migrants. However, one exception occurred early in the 20th century when the United States kept records of emigrants. Using within-country changes in quota allocations in 1921, 1924, and 1929 in combination with 1908–1932 data on specific countries of intended destination of the emigrants, we estimate the effect of quotas on (1) out-migration rates, (2) emigration across skill groups, and (3) the duration of temporary migrants' stays in the U.S. Higher quota restrictions reduced emigration rates, mostly for unskilled laborers and farmers. Higher quota restrictions also increased duration of stay, as the share of migrants staying less than 5 years fell and the share staying 5 to 10 years rose. Return migration behavior was also associated with changes in previous immigrant cohort's networks and savings. Return migration rates were also low during World War I, and more significant population losses from the War in home countries discouraged return migration. Finally, out-migration of German migrants increased substantially during the 1920s.     

The association of life satisfaction and self-rated health with income dynamics among male employees in Japan

In this study, we analyze how life satisfaction and self-rated health are associated with income dynamics. We used data from male employees in Japan (N = 1004) drawn from a panel dataset of career wage records spanning a period of over 30 years. The income history used in this study was based on administrative records; thus, the data were almost free of recall error. Our results show that life satisfaction was more closely associated with a change in lifetime average income or maximum income than with a change in income compared to the previous year, whereas the opposite was true for self-rated health. In addition, life satisfaction tended to resist a decline in response to a fall in income from its average or maximum level, but this was not the case for self-rated health. Furthermore, an income peak experienced in the past made both life satisfaction and self-rated health more sensitive to changes in income, whereas a trough experienced in the past made them less sensitive. These findings suggest that the association of income between subjective well-being and health should be studied further, within a dynamic framework.     

Child labour and academic achievement: Evidence from Gansu Province in China

This paper considers the relationship between child labour and a child's academic achievement in rural China. Using a unique longitudinal, multi-level survey, the Gansu Survey of Children and Families (GSCF) which was enrolled in the Gansu province, I use a quasi-maximum likelihood estimation (QMLE) and find that more than 1 h of child labour in the previous time period has a negative effect on a child's academic achievement in the subsequent period after controlling for child talent. I also show that previous academic achievement has no strong significant effect on current child labour by applying a logistic model. Based on the data, the fact that those effects are not very big or not significant suggests that child labour in China is not a big problem when compared with other developing countries (Bacolod & Ranjan 2008).     

Farm credit and credit demand elasticities in Shaanxi and Gansu

This paper empirically estimates individual household credit demand elasticities based on 897 farm households surveyed in Shaanxi and Gansu provinces in the People's Republic of China (PRC) in October 2009. We used survey-based experimental techniques to extract individual household credit demand functions from which we estimated point demand elasticities. From a theoretical point of view, we proposed that as interest rates fell the demand for credit increased in elasticity, and this appears to hold in our data. We find a range of elasticities with mean point estimates of about ? 0.6. We find that nearly 20% of farm households have nearly perfectly inelastic demands for credit but we also find that nearly 20% have elasticities above ? 0.75 including some 15% that have elasticities greater than ? 1.0. Previous studies that have argued against credit policies because of the low inelasticity of demand do not generally hold. There is much heterogeneity in credit demand and we would argue that a full spectrum of targeted credit policies can be used to address differences across farms.     

Retail power market competition with endogenous entry decision—An auction data analysis

Deregulation in the electric power industry has been aimed at promoting competition and thereby enhancing the industry’s efficiency. We use the auction data of public power procurements to study the impact of the reform on the retail power market in Japan. We quantify this impact by measuring a decline in power charges, controlling for the endogeneity bias caused by the entrants’ bid-submission decisions. Our results suggest that power charges would decline by about 0.48 yen/kW h on average when two or more providers bid at an auction.     

Is the price elasticity of demand for coal in China increasing?

China's dependence on coal is a major contributor to local and global environmental problems. In this paper we estimate the price elasticity of demand for coal in China using a panel of province-level data for 1998–2012. We find that provincial coal demand has become increasingly price elastic. As of 2012 we estimate that this elasticity was in the range − 0.3 to − 0.7 in point estimate terms when responses over two years are considered. The results imply that China's coal market is becoming more suited to price-based approaches to reducing emissions. The elimination of coal consumption subsidies could reduce national coal use and related emissions by around 2%.     

Reducing China's regional disparities: Is there a growth cost?

While China's growth has been spectacular over the past 30 years, it has masked growing underlying disparities in the regional distribution of income with coastal provinces growing at a much faster rate than the rest of the country, exacerbating already marked differences in per capita income. Policy focused on addressing these growing disparities has had to face the possibility that spreading growth more evenly around the country will require a sacrifice of the national growth rate. Yet there is almost no empirical evidence that this is so and, if it is, how big the required sacrifice is. This paper contributes to filling this gap by analyzing the relationship between aggregate growth and the inequality of regional output distribution. We use a VAR model to simulate the effects over time on growth of a reduction in inequality and also the effects on inequality of an increase in growth. We find, first, that in the long run a more equal distribution can be obtained without a growth sacrifice. Second, in the short run a reduction in inequality reduces growth. Third, in the short and long runs an increase in growth actually reduces inequality.     

Stimulating Growth and Investment in Africa: From Macro to Micro Reforms

Abstract: How do we stimulate investment and growth in Africa? This paper focuses on low‐income countries that are ‘good performers’ and not especially endowed with natural resources. Many of these countries have undertaken a set of economic reforms, and have recorded growth rates in per capita GDP of around 5 percent over the past 10 years. But some constraints to growth persist. We look at three things — how business environments create ‘external costs’ for firms and inhibit performance, how investors perceive the constraints to doing business, and the role of political economy factors especially in those countries with lagging indigenous business sectors. Our analysis of investment climate and other data leads us to several recommendations for governments, donors and the private sector itself, including the following: deepen macro reforms; build a strong, unified business forum; create incentives for more responsive governments; and improve risk mitigation and broaden this to domestic investors.     

Magnitude and volatility of Taiwan's net foreign assets against Mainland China: 1981–2009

The ongoing private capital inflows from Taiwan to China is a steady concern for Taiwan's policymakers. According to the official data, Taiwan's private enterprises have cumulatively invested about US$ 150–280 billion in China since 1987. However, the figures are widely perceived to be an underestimation and there exists a huge gap even between the estimations conducted by different government departments. The purpose of this paper is to re-estimate Taiwan's net foreign assets (NFA) against China, revising the so-called “dark matter” hypothesis proposed by Hausman and Sturzenegger (2006, 2007). In contrast to the current statistics being limited to registered direct investment or census investigation, the advantage of our model is that direct investment, portfolio investment, and the possible knowledge and property spillovers are included. We show that changes in Taiwan's NFA against China over GDP are negative in economic and political turmoil, such as the missile crisis in 1995, Asian financial crises in 1997–98, and global tsunami in 2007–09. From 2000, the growth rates we simulate are never lower than the official data till 2009. We also suggest some possible economic causes that lead to the huge Taiwan's NFA against China.     

Economic transition and demand pattern: Evidence from China's paper and paperboard industry

In this study, we investigate the demand pattern and structural changes during the economic transformation using data from the paper and paperboard industry in China. Instrumental variable estimations as well as co-integration analysis and error correction models are applied to the analysis. Our results show that in the early stages of economic reform before 1993, the demand did not respond to price changes; while in the later stages, the demand shows significant responses to its own-price and the price of international markets. In particular, since 1992, the own and cross-price elasticity of demand for domestically made paper and paperboard products becomes, respectively, − 0.69 and 0.59, in the range found in some market economies. We also find that imports are substitutes for domestically made paper and paperboard products, but the reverse is not true; and in the later stage of economic transition, the reliance on international market has increased, as reflected by the lower price elasticity of imports.     

Financial Sector Reforms,Bank Performance and Economic Growth: Evidence from Zambia

Abstract: This paper investigates the effects of market‐based financial sector reforms on the competitiveness and efficiency of commercial banks, and economic growth, in Zambia. The results show that reforms adopted in Phase II (strengthening of regulatory and supervisory, payments and settlements, and financial operations frameworks) and Phase III (implementation of a comprehensive financial sector development plan) had significant positive effects on bank cost efficiency. Macroeconomic variables such as per capita GDP and inflation were insignificant. Further, using an endogenous growth model in which industrial production is a proxy for GDP growth, it was found that bank cost efficiency, financial depth, Phase II and III financial sector reforms, the degree of economic openness, and rate of inflation were significant determinants of economic growth. Phase II policies and the inflation rate have negative effects while the rest of the variables have positive effects on economic growth. Some plausible policy lessons are offered.     

High frequency perspective on jump process,long memory property and temporal aggregation: Case of $-AUD exchange rates

The high frequency 30 min $-AUD exchange rate is investigated using a parametric FIGARCH model. The FIGARCH model is found to be the preferred specification for the 30 min returns and temporally aggregated returns, with similar values of the long memory parameter across various aggregated returns. This paper employs the Bernoulli jump process and the Poisson jump process to represent conditional mean jumps in the high frequency returns and the aggregated returns. The estimation results present that the jumps are quite significant in the conditional mean process and that the long memory parameters are remarkably reduced over the aggregated returns after the jumps are accounted for.     

Selection and historical height data: Evidence from the 1892 Boas sample of the Cherokee Nation

Economists have increasingly turned to height data to gain insight into a population's standard of living. Because height measures are used when other data are unavailable, testing their reliability can be difficult, and concerns over sample selection have led to several vigorous debates within the heights literature. In this paper, I use a unique contemporaneous census to gauge the extent of selection into a contested sample of American Indian heights. I have linked people from the 1892 Boas sample of the Cherokee Nation to the 1890 Cherokee Census. An initial analysis finds evidence of negative selection into the Boas sample. A detailed examination of those measured reveals a more complex story. Two distinct groups are present within the data. The first group consists of 64 members of the Cherokee elite. Their households owned more land, invested more in improvements to their land, and had higher literacy rates. The remainder of the Boas sample is poor relative to both the elite and the rest of the Cherokee Nation. Part, but not all, of this difference is due to their residential location. Forty percent of the Boas sample lived in poorest district of Cherokee Nation. These differences in wealth between the two groups were mirrored by a fairly dramatic difference in average heights. The average height of all men in elite group was 173.9 cm while the non-elite were several centimeters shorter at just 171.2 cm.     

Commute time and subjective well-being in urban China

Using data from the 2010 China Family Panel Studies, this study investigates the association between commute time and subjective well-being in a sample of 16- to 65-year-old employees in urban China. We find evidence that a longer commute time is associated with lower levels of both life satisfaction and happiness, especially when the commute times are extreme (≥ 1 hour per day). A multiple mediation analysis further indicates that the relation between commute time and happiness is partially mediated by the time spent on daily activities, particularly sleep. We also calculate the amount of income necessary to compensate an employee's loss in well-being at approximately 82 yuan per hour of commute time, implying that in urban China the annual loss of well-being amounts to around 10 billion yuan.     

Fiscal limits and sovereign default risk in Japan

It is widely known that Japan has the highest debt-to-GDP ratio among OECD countries. If Japan’s national debt continues to balloon, fiscal crisis may occur in the future. This paper develops a closed economy model with defaultable government debt and conducts a simulation to investigate future sovereign debt risk.First, we estimate the fiscal limit which is defined as the sum of the discounted maximum fiscal surplus in all future periods. It is assumed that a partial default occurs when the amount of government debt exceeds the fiscal limit. We calculate the revenue-maximizing tax rate at the peak of the Laffer curve to derive the fiscal limit. As a result, the estimated average fiscal limit in Japan is much higher than that in Greece. In the Japanese economy, households are more patient and desire greater savings from greater discount factor derived from a lower real interest rate. Household saving habits support government bonds. This is the main reason why the Japanese government could have had a massive debt in addition to some room to raise the tax rate. Second, we simulate the model, using the estimated fiscal limit and non-linear computational methods. If the government debt-to-GDP ratio continues to increase for the next 20 years, the default probability will be over 10% and the sovereign risk premium will be approximately 2%. Furthermore, the default probability will reach approximately 80% and the sovereign risk premium will be 10% 30 years later.