Air pollution and procyclical mortality: Evidence from China

There is growing evidence that in developed countries, mortality rises (falls) in economic booms (busts). However, little is known about the cyclical pattern of mortality in developing countries. Using China's city-year data, we find that the total mortality in China also exhibits procyclical fluctuations. In exploring the mechanisms, we find that air pollution is one of the reasons for procyclical fluctuations in total mortality. Specifically, economic booms lead to severe air pollution, worsening human health and thus increasing death rates. Moreover, we find that changes in lifestyles may not be an important reason for procyclical mortality in China.     

The impact of lockdown on air pollution: Evidence from an instrument

This paper studies the impact of lockdown measures in response to the outbreak of COVID-19 on a prefecture's air pollution in China. To avoid potential endogenous problems, we exploit the bilateral population flow from the Baidu Migration Index to predict prefectures' probability to undertake lockdown measures. Our results using difference-in-differences with the instrumental variable show that a prefecture's lockdown measures significantly reduce its air quality index (AQI) by around 35%, and yet the result for difference-in-differences with OLS is only around 11%. We also find that a prefecture under lockdown reduces its PM₁₀ and PM_2.5 by around 25% and 35% respectively, and the results of diff-in-diff with OLS are only around 11% and 12%. The sharp difference between these two approaches seems to imply that there is a strong heterogeneity in lockdown stringency across prefectures.     

Trade openness and air pollution: City-level empirical evidence from China

We seek to contribute to the debate over trade openness and the environment by taking specific account of the endogeneity of trade openness. We use exogenous geographic determinants of trade as instrumental variables as well as distance to Huai River for identification which is based on China's heating policy. Using air quality measure from NASA, we find that trade increases three measures of air pollution: SO₂, NO₂, and Aerosol concentration.     

Air pollution and brain drain: Evidence from college graduates in China

This paper provides one of the few evidence about migration responses among talents to air pollution. Specifically, we investigate the impact of PM_2.5 concentration on job location decisions of Chinese college graduates at the beginning of their professional careers. The results indicate that a 10-unit increase in PM_2.5 concentration raises college graduates' probability to leave their current city by 10% point. We also find larger impacts on graduates from elite colleges and less polluted hometowns. Our empirical results are consistent with a simple model in which the location choice of college graduates depends on their wage payment and air pollution. Our findings supplement existent literature in documenting important ways in which air pollution may associate with the loss of highly-educated talents.     

Indoor air quality and health: Empirical evidence from fluoride pollution in China

In this paper we conducted an econometric analysis to investigate the impacts of fluoride pollution on health. Burning high-fluoride-content coal indoors is the primary source of fluoride pollution in Guizhou Province of China. Exploiting longitudinal data from China Health and Nutrition Survey, we applied individual fixed effect models and triple difference models to examine the effects of whether households use coal as domestic fuel. The results showed that fluoride pollution from coal burning significantly increases the diastolic and systolic blood pressure levels of adults. And the pollution also leads to higher likelihood of underweight. Our further analysis indicated that fluoride pollution from coal burning during the infant period greatly reduces the height and weight of children in their childhood and adolescence periods. We also explore the mechanism by investigating the influence of fluoride pollution exposure on birthweight and find evidence that fluoride pollution had a negative impact on prenatal development.     

Air pollution and mental health: Evidence from China Health and Nutrition Survey

Using the mental health data of the elderly in China Health and Nutrition Survey and city-level air pollution data, this paper empirically analyzes the influence of air pollution on the mental health of the elderly. Results show that with the aggravation of air pollution, the mental health of the elderly decreases significantly. Specifically, a 10 μg/m³ increase in air pollution causes a decrease of 2.43 points in mental health. Air pollution has a greater effect on males, rural residents, and low-income and low-education groups. In addition, this paper tests two mechanisms, namely, health status and individual activity, and finds that air pollution can reduce mental health by increasing the incidence and severity of disease. Moreover, the intensification of air pollution leads the elderly to prefer indoor activities. Based on individual data, this paper estimates the health effects of air pollution, which provides a basis for the formulation of environmental and health policies.     

Does export liberalization cause the agglomeration of pollution? Evidence from China

This paper investigates the impact of export liberalization on the geographic concentration of water pollution. Data shows that water pollution emissions are unevenly distributed across regions in China. Using China's accession to the World Trade Organization (WTO) as the exogenous shock, we identify a negative causal effect of export liberalization on the agglomeration of water pollution across regions in China. It suggests that relatively more water pollution is discharged in those previously low-pollution regions after export liberalization. We confirm this with data on regional relative pollution emissions. Further decomposition shows that it is the intensive margin (average pollution emission) rather than the extensive margin (number of polluting firms) that drives the deglomeration of water pollution emissions within the liberalized industry.     

Border pollution reduction in China: The role of livestock environmental regulations

This paper studies the effect of environmental regulations on border pollution reduction in developing countries' rural areas by taking livestock environmental regulations (LERs) in China as a quasi-natural experiment. Applying the generalized difference-in-difference-in-differences (DDD) method, we find that LERs are effective in reducing border pollution: the chemical oxygen demand (COD) and ammonia nitrogen (NH₃−N) of the border counties are 21.78% and 39.51%, less than that of the interior counties. We document that the effectiveness of LERs in reducing border pollution can be attributed to the fact that LERs require local governments to make collective decisions in fighting livestock pollution. Further heterogeneity analysis finds that the reduction effect of LERs on border pollution is greater in the downstream border and underdeveloped areas. Our paper implies that the externality of border pollution can be internalized through collective decision-making between local governments.     

Trends in elderly health by cohort: Evidence from China

China has the world's largest number of older persons and is undergoing rapid demographic and economic transitions. Using longitudinal data from seven waves of the China Health and Nutrition Survey (CHNS) spanning 1991–2009, this study examines trends by birth cohort for persons born during 1912–54 on several dimensions of elderly health—chronic diseases, physical function limitations, and excess weight. A fixed effects specification was used to distinguish trends in health, physical function, and weight common to all adult age groups and differential trends in these measures according to the person's birth year. The empirical results show that while there was a decline in physical function limitations over time, persons born in later years were more likely to experience a stroke and physical function limitations at older ages than were persons born earlier. A similar pattern occurred for stroke, but not for the other heath indicators. These findings are robust after accounting for sample attrition. The secular changes in health and function could have occurred for several reasons. Among the underlying mechanisms the data allow us to analyze, improved access to medical care and expanded health insurance coverage only had minor effects on observed changes in health and physical function.     

The path towards sustainable finance: Venture capital and air pollution in China

Financing sustainable growth has attracted global attention and discussion in recent years. This study investigates the effect of venture capital, as a potential source of sustainable finance, on air pollution in China from 2003 to 2016. Using the unique Government Guidance Fund as instrumental variable, we find that venture capital activities have significantly reduced local air pollution in cities of China. To be specific, a one standard deviation increase in the VC amount leads to 4% decrease in PM_2.5 concentration and 6% reduction in industrial SO₂ emission. The effects are insensitive to a wide range of robustness tests. Cities characterized by more rigorous environmental supervision, superior business environments, and stronger innovation incentives benefit more from venture capital activities. We further show that venture capital helps improve local air quality by boosting general and green innovation, increasing the investment of new green enterprises, as well as crowding out the investment of polluting industries.     

Fiscal decentralization and environmental pollution: Evidence from Chinese panel data

China's environmental pollution casts a shadow on its economic success. Concerning fiscal decentralization, China introduced the rule-based tax assignment system in 1994. To avoid the structural change in underlying fiscal regimes, we use the provincial panel data during the period 1995–2010. We find that fiscal decentralization has no significant effect on environmental pollution as it is measured per capita emission of wastewater, waste gas or solid waste in system GMM (Generalized method of moments) estimation. Our results are robust when we use different measures of fiscal decentralization. We further find that fiscal decentralization has a significant, positive effect on pollution abatement spending and pollutant discharge fees, which indicates possible mechanisms for fiscal decentralization to help protect the environment.     

Health risks of exposure to waste pollution: Evidence from Beijing

Waste pollution is a major environmental problem in big cities in China such as Beijing. The phenomenon of “cities besieged by waste” has received substantial attention of local residents, social media and policymakers. We investigate the causal impact of exposure to waste pollution on the health outcomes of migrants, who are in a more disadvantageous position than native residents of Beijing. Using administrative waste disposal data and the China Migrants Dynamic Survey, we find that a one-standard-deviation increase in the level of emission from the nearest waste disposal site (WDS) increases by 10–11 percentage points in the probability of a migrant's sickness, but we do not find significant evidence when using the proximity to waste disposal sites as an indicator of waste pollution exposure. Our flindings suggest residence near WDSs poses a health risk.     

Tax and leverage: Evidence from China

This study exploits two institutional features of China to test the causal link between tax and capital structure. First, the central government exclusively determines the corporate tax rate in China, which results in changes in corporate income tax rates across different Chinese public firms over the period of 2000–2011. Such mandatory tax shifts provide a quasi-natural experimental setting for our difference-in-differences analysis investigating the impact of tax on leverage. We find evidence supporting the dynamic trade-off theory, namely that firms are unresponsive to tax cuts but increase long-term leverage when taxes rise (particularly those in low statutory tax regimes). Second, governmental intervention in capital allocation is common in China such that political connections are usually regarded as an asset for firms in accessing bank loans. Using anti-corruption events as shocks to the value of political connections over the sample period, our research is the first study to show that political connections become a liability that enables banks to recall loans from affected firms during the anti-corruption campaign periods. This change overturns the typical tax-leverage relationship observed, as we find anti-corruption affected firms reduce long-term leverage when taxes are cut and they become insensitive to tax increases. Our results reveal the importance of political ties in explaining how firms adjust their capital structure to tax changes, which is extremely relevant to policy makers and regulators when monitoring bank loan markets.     

Retirement and health: Evidence from China

One typical feature of China's pension system is that retirement is mandatory. By exploiting the exogenous change created by this mandatory retirement policy, we use the mandatory retirement age as an instrument for retirement status to examine the effect of retirement on individual health using data from the China Health and Nutrition Survey (CHNS). Our main finding is that the probability of “fair” or “poor” self-reported health among white-collar workers decreases by 34 percentage point after retirement. This result is generally robust to different model specifications, alternative measures of health, and different subsamples. In addition, we deliver evidence that increased health-related exercises and the cultivation of a better lifestyle are two possible channels through which retirement affects health.     

Green creates value: Evidence from China

This study explores whether and how the issuance of green bonds affects firm value in China from January 2015 to September 2020. Based on a multiperiod difference-in-differences model, we observe that firm value increases with the issuance of green bonds, but this positive effect is unsustainable and weakens gradually. The heterogeneity analysis suggests that the expected positive effect of green bond issuance on firm value is highly evident in non-state-owned firms, small firms, firms in green finance pilot zones, and firms in the eastern region. Moreover, we explore the mechanism in terms of financing condition, government support, and green investment and find that the financing condition, tax burden, and government subsidy of firms improve following the issuance of green bonds. However, green investments erode firm profits, which may lead to the unsustainability of the driving effect of green bond issuance on firm value. Further analysis reveals that when the volume of the green bonds issued by firms increases by one standard deviation, firm value increases by 0.032 units on average.     

外国直接投资与旅游业:来自中国的证据

本文将Zaptata和Rambaldi(1997)提出的方法应用于中国的季度数据,以便检验中国的外国直接投资(FDI)和旅游业之间的因果关系。实证结果表明,由FDI到旅游存在着单向因果关系。这一发现有助于解释过去的十几年中中国旅游市场的快速发展。     

Uncertainty and housing tenure choice by household types: Evidence from China

In this paper, we propose an uncertainty-preference-housing choice model and empirically investigate the effect of uncertainty on the probability of homeownership using microdata from Chinese cities. Introducing several measures of uncertainty, we observe that after the reform of the housing distribution system, unemployment uncertainty negatively affects the housing tenure choices of high-income families, whereas educational expenditure uncertainty has a negative effect on the homeownership rates of low-income families. We also find that unemployment uncertainty negatively affects the housing choices of local families and that medical expenditure uncertainty has a negative effect on housing choice for migrant families. Finally, an increase in unemployment uncertainty decreases the homeownership rate among families in which the head of household did not experience the change in enterprise ownership.     

China Spillovers: New Evidence from Time-Varying Estimates

The recent “rebalancing” of China’s economy has raised concerns that the country’s growth slowdown may have large global implications. This note looks at this issue by analyzing the effects of China’s growth shocks on the output of other countries and how these effects have changed over time. Estimates indicate that the magnitude of China’s spillovers has steadily increased during the last two decades, but remains yet limited. Spillovers are larger in neighboring (Asian) countries and in emerging markets and developing economies. Trade linkages remain main transmission channels. In addition, a negative shock in China has (marginal) positive effects for net commodity importers while negative for net commodity exporters.     

所有制改革与OFDI:中国的证据

所有制改革为中国对外直接投资(OFDI)提供了制度保证,是经济转型过程中促进中国OFDI扩张的一种机制。文章采用2003~2014年187个中国对外直接投资国(地区)的跨国数据,实证研究了所有制改革及其引起的对外直接投资主体多元化对中国OFDI的影响效应。在控制了市场寻求、资源寻求与技术寻求动机以及东道国市场风险和人民币汇率等影响因素后,实证结果表明:所有制改革对OFDI具有显著的正向影响;在对外直接投资主体多元化方面,有限责任公司投资主体占比的增加对OFDI具有显著的正向影响,国有企业与集体企业投资主体占比的增加对OFDI具有显著的负向影响,股份有限公司、股份合作企业、外商投资企业和私营企业投资主体占比的增加对OFDI的影响效应不显著或具有负向影响;进一步考虑东道国异质性的研究发现,金融危机前所有制改革与对外直接投资主体多元化对中国OFDI的影响在发达国家和发展中国家或欠发达国家之间是有差异的,而金融危机后对中国OFDI的影响差异不明显。     

Corruption and firm growth: Evidence from China

Corruption is one of the most pervasive obstacles to economic and social development. However, in the existing literature it appears that corruption seems to be less harmful in some countries than in others. The most striking examples are well known as the “East Asian paradox”: countries displaying exceptional growth records despite having thriving corruption cultures. The aim of this paper is to explain the high corruption but fast economic growth puzzle in China by providing firm-level evidence of the relation between corruption and growth and investigating how financial development influences the former relationship. Our empirical results show that corruption is likely to contribute to firms' growth. We further highlight the substitution relationship between corruption and financial development on firm growth. This means that corruption appears not to be a vital constraint on firm growth if financial markets are underdeveloped. However, pervasive corruption deters firm growth where there are more developed financial markets. This implies that fast firm growth will not be observed until a later stage of China's development when financial markets are well-functioning and corruption is under control. Furthermore, the substitution relationship exists in the private and state-owned firms. Geographically, similar results can be seen in the Southeast and Central regions.