Financial development and economic growth: Evidence from China

This paper investigates the relationship between financial development and economic growth for the case of China over the period 1952–2001. After considering the time series characteristics of the dataset, a multivariate vector autoregressive (VAR) framework is used as an appropriate specification and the long-run relationship among financial development, growth and other key growth factors is analyzed in a theoretically based high dimensional system by identification of co-integrating vectors through tests of over-identifying restrictions. The empirical results suggest that there exists a unidirectional causality from economic growth to financial development, conclusions departing distinctively from those in the previous studies.     

Aid and economic growth in LDCs: Evidence from Sub-Saharan Africa

This paper uses a disaggregated cross-national time-series aid data and a Least Squares Dummy Variables (LSDV) model to investigate the effects of aid on economic growth in Sub-Saharan Africa. We find that, contrary to what some critics of aid argue, aid has a small but positive and significant effect on economic growth in Sub-Saharan Africa. A simultaneous equation specification of the model shows that aid affects economic growth in Sub-Saharan Africa directly and indirectly through increased domestic savings and investment.     

Economic research and economic growth: Evidence from East Asian economies

Based upon page counts of articles published in 60 quality economics journals, the role of economic research is examined for five East Asian economies. In Hong Kong, causality runs bi-directionally between research productivity and economic growth; in Japan, the causal effects tend to be one direction from economic growth to research publications; in Korea and Taiwan, causality runs the other way around from publications to growth; and in Singapore, the causal effects are small and insignificant. Socioeconomic differences in each economy help to explain the various causal directions found.     

The impact of foreign direct investment and human capital on economic growth: Evidence from Chinese cities

Using a panel of Chinese cities over the period 1991–2010, we examine the determinants of economic growth, focusing on the role of foreign direct investment (FDI) and human capital. Consistent with the predictions of a human capital-augmented Solow model, we find that the growth rate (along the path to the steady-state income level) of per capita GDP is negatively correlated with population growth rate and positively correlated with investment rate in physical capital and human capital. We find that FDI has a positive effect on the per capita GDP growth rate and this effect is intensified by the human capital endowment of the city. The latter suggests that one way that human capital contributes to growth is to serve as a facilitator for technology transfers stemming from FDI. Furthermore, we find some suggestive evidence that the FDI-human capital complementary effect is stronger for technology-intensive FDI than for labor-intensive FDI. Our results are robust to alternative measures of human capital, model specifications, and estimation methods.     

Human capital quality and the regional economic growth: Evidence from China

China's economic development has advanced from a high-speed to a high-quality growth stage in recent years. The optimization and upgrading of the economic structure require high-quality human capital to support an innovation-driven economy. In this paper, a general equilibrium model of human capital (Xiang & Yeaple, 2018) is applied to estimate the cognitive and non-cognitive productivities based on Chinese provincial-level macro-data and individual labor's micro-data from 2008 to 2017. The weighted power mean of cognitive and non-cognitive productivities helps calculate the provincial-level human capital quality index (HCQI), which provides a realistic estimate of human capital quality. We find that the improvement of the HCQI leads to convergence in economic growth in China's provinces. HCQI can help explain the differences in economic growth levels in different regions of China. Our study provides a constructive step in understanding cognitive and non-cognitive abilities and HCQI in China, which could help guide education investment policy in China and its provinces.     

Bureaucratic integration and synchronization of regional economic growth: Evidence from China

We analyze the impact of the central-local bureaucratic relation on the synchronization of regional economic growth in China using pairwise panel data of 31 provincial-level administrative units (465 pairs) from 1993 to 2014. We identify a significant positive impact of bureaucratic integration (top provincial-level government officials who have served in the central government) on regional output synchronization. Results from the estimations of instrumental variable, generalized method of moments, and subsample remain robust. However, bureaucratic rotation (top provincial-level government officials with prior working experience in other province) has no effects on regional output synchronization.     

Bank market power, economic growth and financial stability: Evidence from Asian banks

This paper examines whether Asian banks are still prone to moral hazard in the aftermath of the 1997 Asian crisis. Using a sample of commercial banks from 12 Asian countries during the 2001–2007 period, our empirical findings highlight that greater market power in the banking market results in higher instability. Although banks are better capitalized in less competitive markets their default risk remains higher. A deeper investigation however shows that such behaviour is dependent on the economic environment. Higher economic growth contributes to neutralize greater risk taking and higher instability in less competitive markets.     

Public choice of economic policy: The growth of agricultural protection

Zusammenfassung “Public choice” und Wirtschaftspolitik: Die Zunahme der Agrarprotektion. - In diesem Aufsatz wird konzeptionell ein Rahmen entwickelt, um die Gründe für die jeweilige Wirtschaftspolitik zu erkl?ren und um ein verbreitetes Phónomen der wirtschaftlichen Protektion zu interpretieren, das von verschiedenen Untersuchungen bestótigt wird, n?omlich die Tendenz der Agrarprotektion, mit steigendem Entwicklungsniveau anzuwachsen. Das Modell umfa?t die “public-choice”-Theorie des politischen Einflusses von Gruppen in einem nichtkooperativen System, an dem die Befürworter und Gegner einer bestimmten Wirtschaftspolitik beteiligt sind. In den frühen Phasen der wirtschaftlichen Entwicklung schlógt die Waage des politischen Einflusses meist zugunsten der Konsumenten und der Industrie aus. Wenn der Entwicklungsproze?voranschreitet, verschieben sich die Gewichte zugunsten der landwirtschaftlichen Erzeuger. Bei hóherem Entwicklungsstand werden die Realeinkommen der Landwirte empfindlicher in bezug auf die Agrarpreise, wóhrend die Konsumentenwohlfahrt und die nicht-landwirtschaftlichen Gewinne davon weniger berührt werden.

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Résumé ?Public choice? et la politique économique: La croissance de la protection agricole. - Dans cette étude les auteurs développent un cadre conceptuel pour expliquer les causes de la politique économique et l’appliquent pour interpréter une structure pervasive concernant la protection économique qui est consistante avec plusieurs études: la tendance de la protection agricole d’accro?tre avec le niveau de développement économique. Le modèle inclut les aspects de la théorie du ?public choice? d’une provision de groupe de l’influence politique en cadre non-coopératif concernant les propagateurs et les opposants d’une certaine politique publique. En jeune stage du développement, la balance de l’influence politique a la tendance de se pencher envers les consommateurs et les producteurs industriels. Si le développement s’avance la balance se tourne en faveur des producteurs agricoles. Aux niveaux plus hauts du développement, les revenus réels des producteurs agricoles deviennent plus sensitifs au prix agricole pendant que le bien-être des consommateurs et les profits non-agricoles deviennent moins sensitifs.

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Resumen ?Public choice? de politica económica: el aumento de la protection a la agriculture. - En este trabajo se desarrolla un marco conceptual para explicar las causas de la politica económica y se lo aplica con el fin de interpretar una pauta común en relation a la protection económica: la tendencia que tiene la protection a la agriculture de aumentar con el nivel de desarrollo económico. El modelo contiene aspectos de ?public choice? en cuanto a la influencia poh’tica de grupos sociales en un contexto no cooperativo abarcando a defensores y opositores de una cierta politica. En las primeras etapas del desarrollo la balanza de influencia politica tiende a inclinarse en favor de los consumidores y de los productores industriales. Con el avance del desarrollo la balanza se inclina en favor de los productores de la agricultura. En las etapas avanzadas del desarrollo el ingreso real de los productores de la agriculture se torna más sensitivo al precio mientras que el bienestar del consumidor y los beneficios de los demás sectores se tornan menos sensitivos al precio.

     

Policy Determinants of School Outcomes under Model Uncertainty: Evidence from South Africa

In this paper, we assess the determinants of secondary school outcomes in South Africa. We use Bayesian model averaging techniques to account for uncertainty in the set of underlying factors that are chosen among a very large pool of explanatory variables in order to identify the subset of explanatory variables most strongly associated with the dependent variable. Our analysis indicates that the socio‐economic background of pupils, demographic characteristics such as population groups (Black and White), as well as geographical locations account for a significant variation in pupils’ achievement levels. We also find that the most robust policy determinants of pupils’ test scores are the availability of a library at school, the use of IT in the classroom as well as school climate.     

Estimation of productivity and markups with price dispersion: Evidence from Chinese manufacturing during economic transition

We estimate firm productivity and markups in the presence of heterogeneous output and input prices. We assume that firms are monopolistically competitive in the output market and that state firms are favored and pay lower prices for inputs due to political connections. The proxy-variable (or called the control-function-based) approach of structurally identifying production functions and productivity is customized to our new setting. Our approach solves the underidentification problem inherent in the standard proxy-variable method. We investigate the Chinese transportation equipment industry and find evidence against perfect competition and price homogeneity. We also find that productivity and markup differentials and dynamics are consistent with the market-oriented reforms in China.     

Economies of scale,resource dilution and education choice in developing countries: Evidence from Chinese households

Recent empirical studies suggest that the negative correlation between the quantity of children within a family and their educational attainment, which is widely observed in developed countries, is inconsistent or even rejected in developing countries. This paper aims to integrate these divergent empirical results into a unified theoretical framework by introducing scale economies into the classical model of Becker and Lewis (1973). As a result, the “anomaly” of an observed upward or an inverted U-shaped relationship can be expected as the scale economies effect dominates when there are few children in a family. Using data from the China's 1990 and 2000 censuses, this study further tests some hypotheses induced from the model. Educational attainment increases with sibling size at first and then drops. Children with one or two siblings achieve the highest education during the period our sample covers. The inverted U-shaped correlation is more robust for rural subsamples, for older cohorts and for economically underdeveloped regions and groups, which is consistent with the prediction of the model.     

实证分析:外资与中国经济增长

一、外资是我国固定资产投资的重要资金来源 从动态经济增长的角度看,经济的潜在产出取决于劳动力、资本和技术进步等生产要素的积累水平。利用外资对一国经济增长的影响,首先在于其是资本积累的重要来源之一。从我国全社会固定资产     

School attendance and economic shocks: Evidence from rural Zimbabwe

Unpredicted shocks such as weather, pests or price changes affect agricultural households negatively or positively. The shocks have two opposite effects (income and substitution) on parents’ investments in the human capital of their children, and it is not predictable from theory whether the income effect or the substitution effect of a shock has a greater impact on the investments. Therefore, it is unknown whether human capital investments (i.e. sending children to school rather than having them work) are procyclical or countercyclical. In this paper we show how hyperinflation may affect investments in the education of children by their parents using three data-sets from Zimbabwe. We find that human capital investments are countercyclical (the substitution effect dominates) in rural areas of Zimbabwe during a shock. Therefore, policymakers in Zimbabwe need to be worried about decreased schooling of children during positive shocks in the rural areas.     

Product differentiation,export participation and productivity growth: Evidence from Chinese manufacturing firms

In this paper, we investigate how the degree of export participation and product differentiation affect firms' productivity growth through learning-by-exporting. We extend the model of Melitz and Ottaviano (2008) to endogenize the effort firms allocate to learning. This effort choice depends on both the degree to which firms enter export markets and the extent to which products are differentiated across producers. Using a firm-level dataset from China's manufacturing industries, we implement propensity score matching methods to test the model's predictions. Our results indicate that the degree of export participation is positively correlated with TFP improvements. Simultaneously, we empirically verify that firms exporting less differentiated products experience faster TFP growth than those exporting more differentiated products.     

International trade and economic growth: evidence from a panel ARDL-PMG approach

The purpose of this work is to study the impact of trade openness on the economic growth of the countries bordering the Mediterranean using a panel of eight countries from 1975 to 2016. We apply ARDL panel which is a technique recently developed. We study the effects of openness to international trade on economic growth while incorporating economic policy variables. The results show that the variables of commercial and financial openness favor economic growth. The free trade agreements that the European Union has signed with certain countries in the Mediterranean basin are designed above all to encourage greater regional economic integration and an increase in their potential growth. Therefore, our findings show that the financial sector is slow to affect economic growth in these countries. This study reveals that human capital and the investment rate support the economic growth of our sample. In addition, we conclude that a process of economic convergence has begun in these countries. A causal analysis was carried out we found an unidirectional causality ranging from economic growth to trade openness.

     

The Inflation-Output Variability Tradeoff and Monetary Policy: Evidence from a GARCH Model

This paper empirically investigates the Taylor curve volatility tradeoff in light of the stochastic behavior of the conditional variances of output and inflation. Stressing structural instability between periods before and after the 1979-1982 monetary policy regime change, I implement a bivariate generalized autoregressive conditional heteroskedasticity model to capture the output-inflation variability tradeoff and to explore the plausible impact of a change in the federal funds rate on the two conditional volatilities. I further evaluate the impacts of anticipated and unanticipated policy actions measured by two alternative policy reaction functions—one from a vector-autoregression-based reduced-form equation and another based on the Taylor rule. In addition to showing a volatility tradeoff relationship, the empirical model reveals different magnitudes of policy effects on output and inflation volatility across the two sample periods.     

Valuing research output: Evidence from a Chinese university

Exploring the economic value of research output is a crucial but neglected issue and thus is worth gaining attention. Using data concerning the promotion from a medium-ranked university in China during 2011–2019, this paper proposes a novel methodology that combines a regression discontinuity design and the theory of “Value of a Statistical Life” to quantify the monetary value of research output. Our findings suggest that each unit of research score is worth $467 for a promotion to associate professor and $515 for full professors. Based on the rate for full professors, the computed economic values for a publication in ordinary journals, famous journals, and top journals are around $1,538, $5,154, and $20,615, respectively. Additionally, the economic value of a book publication is approximately $7,723. These research outputs are significantly undervalued compared to the faculty's own total income, the income of peers in similar sectors, or the income of peers from other countries' higher education. Our analysis provides not only insights for incentive system reform for Chinese higher education but also a methodology that can be universally applicable to any higher institutions that use the scoring system or set implicit research standards in the promotion and merit process.     

Economic and environmental outcomes of economic transition: Evidence from a quasi-experiment in China

China is actively seeking an economic transition to achieve high-quality development, which means economic growth and environment improvement. This paper evaluates the economic and environmental effects of a pilot zone for transformation of growth engine (TGE) policy in Shandong province, China. We collected the monthly data of 73 prefecture-level cities in five provinces of central and eastern China from 2015 to 2020, then used the boundary discontinuity difference-in-differences (BD-DID) for identification. The results show that this pilot policy has effectively improved environmental quality while achieving economic growth, but the core zones did not perform well in environmental improvement. Analysis of the mechanism shows that innovation, infrastructure and pollution control are important channels of the TGE policy in improving the economy and environment.