Abstract This study assesses the effect of human capital expansion on China's export product quality. It employs the difference-in-differences (DID) framework based on a quasi-natural experiment investigating the 1999 higher education enrollment expansion as the exogenous policy shock. The empirical results confirm that human capital expansion appreciably improved the quality of China's export products. Human capital expansion promoted the transformation and upgrading of old products and the development of new products in term of intensive margin; it strengthened the endowment advantages of in ..read more

Abstract This paper uses China's value-added tax (VAT) rate reform as a quasi-natural experiment to identify the impacts of VAT rate shocks on corporate financial leverage. The results indicate that the reform reduced corporate total leverage significantly. There was a decrease in short-term leverage, but long-term leverage showed no significant change. These results remained robust across a series of robustness checks. Mechanism analysis shows that increasing profitability and improving cash flows acted as intermediary channels for the reform's impact on leverage. The reform also contributed ..read more

Abstract Existing research on the measurement of the valuation effect mainly follows the residual method proposed by Lane and Milesi-Ferretti (2001). This cannot be used to perform structural decomposition. We propose an aggregation approach rather than the residual method to measure structurally the investment flow and valuation effect of China's external assets. The results indicate that the valuation effect of China's external assets has been highly volatile and it was negative during the pandemic period. The structural decomposition shows that portfolio investment and direct investment mad ..read more

Abstract Post-disaster aid is widely regarded as important in helping local recovery and development. This paper examines the effectiveness of post-disaster aid on exports, which are a driving factor of economic development. It reports a natural experiment in China – the case of post-disaster aid following the Wenchuan earthquake in 2008 – to examine how donors' experiences affected the exports of manufacturing firms in disaster-stricken counties. The export experience of the donor was important. Aid coming from donors with more export experience was more beneficial to the exports of firms in ..read more

Abstract We investigate the causal relationship between foreign ownership and international trade performance by comparing foreign-acquired firms with similar domestic-acquired firms in China with regard to changes in their post-acquisition international trade performance. Our findings indicate that foreign ownership significantly enhanced the probability of both exporting and importing, and strongly increased trade value. Foreign ownership took effect from the year of the acquisition and persisted for at least 2 years. It stimulated both processing trade and ordinary trade, and expanded produ ..read more

Abstract Income mobility is a key issue for understanding the process of economic growth and distributional change. Some economists have used the concept of “pro-poor growth” to examine, with individual-level panel data, whether the poor benefit more than the rich from economic growth by tracking the extent of income mobility among different population subgroups. There is also literature in macroeconomics on the measurement of convergence. This paper introduces population-weighted relative and absolute indices of mobility, convergence, and pro-poor growth; it also distinguishes between anonymo ..read more

Abstract This paper employs dynamic spatial econometric methods to analyze the impact of the sister-city relationship on Chinese outward foreign direct investment (OFDI) using a linked country-level dataset from 2003 to 2016. The results show strong and robust evidence that the sister-city relationship has been a crucial OFDI location determinant in host countries and their neighbors. Specifically, the sister-city tie between China and the host country has stimulated Chinese OFDI in host countries. Moreover, Chinese OFDI in host countries would be reduced if China concluded sister-city ties wi ..read more

China &World Economy, Volume 32, Issue 1, Page 259-262, January-February 2024 ..read more

Abstract The Chinese government has emphasized innovation as the primary driving force for economic development in the new era. This paper studies the effect of import policy uncertainty (IPU) on the innovation activity of Chinese manufacturing firms. It establishes a simple model to show that the presence of IPU encourages innovation and that a reduction in IPU discourages innovation. It distinguishes the almost unnoticed IPU reduction from tariff reduction on China's WTO accession and develops a novel difference-in-differences specification that identifies the negative effect of IPU reductio ..read more

Abstract This paper reconsiders the roles of China and some developed countries in the network of carbon emission transfers via international trade in value added from a new perspective of network governance. Network search intensity (NSI) and the extended gravity model are used with cross-country panel data to analyze the mechanism of China's engagement in network governance of carbon emission transfers. The results show that from 2000 to 2009, China was a net exporter of carbon emissions, even though it shifted from the semi-periphery to the core in the network of carbon emissions embodied i ..read more