Showing papers in "Chinese Economy in 2009"
TL;DR: Wang et al. as discussed by the authors conducted an event study using a sample of cash dividend changes from all listed A-share firms in China during the period from 2000 to 2004, and examined whether the dividend-signaling hypothesis holds in China's stock markets.
Abstract: An event study using a sample of cash dividend changes from all listed A-share firms in China during the period from 2000 to 2004 was conducted to investigate the announcement effect of cash dividend changes and examine whether the dividend-signaling hypothesis holds in China's stock markets. The results indicate that the announcement of cash dividend changes has a positive influence on share prices, but only partly support the dividend-signaling hypothesis. The study also found that there is no great dissimilarity between the announcement effects of cash dividend changes for different stock markets in China. However, the announcement effect of cash dividend changes for different sample periods exhibits distinct differences that may have a close connection with the promulgation and execution of two administrative rules. Cross-sectional analysis shows that both cash dividend yield and the ratio of nonfloating shares have explanatory power on the announcement effect of cash dividend changes.
48 citations
TL;DR: In this paper, the authors examined the productivity growth of the nationwide banks of China over the ten years to 2006 using a bootstrap method for the Malmquist index estimates of productivity growth are constructed with appropriate confidence intervals.
Abstract: This study examines the productivity growth of the nationwide banks of China over the ten years to 2006. Using a bootstrap method for the Malmquist index estimates of productivity growth are constructed with appropriate confidence intervals. The paper adjusts for the quality of the output by accounting for the non-performing loans on the balance sheets and test for the robustness of the results by examining alternative sets of outputs. The productivity growth of the state-owned banks is compared with the Joint-stock banks and it determinants evaluated. The paper finds that average productivity of the Chinese banks improved modestly over this period. Adjusting for the quality of loans, by treating NPLs as an undesirable output, the average productivity growth of the state-owned banks was zero or negative while productivity of the Joint-Stock banks was markedly higher.
47 citations
TL;DR: Wang et al. as mentioned in this paper pointed out that Chinese multinational firms are similar to those in developed countries in many respects, but differ largely in ownership structure, mainly from China's institutional organization and efficient management in the production process.
Abstract: Since 2003, China has been one of the most significant sources of outward foreign direct investment (FDI) in the world. How did this happen? What are the features of Chinese outward direct investment (ODI)? Are they different from developed-country FDI? Why do Chinese firms go multinational? What competitive advantages do Chinese firms have in going multinational? The Chinese ODI boom is a result of China's rapid economic growth and its "going-global" strategy. Chinese multinational firms are similar to those in developed countries in many respects, but differ largely in ownership structure. Their competitive advantages are derived mainly from China's institutional organization and efficient management in the production process. Four motivations of Chinese ODI are: to maintain and expand international markets, to secure a supply of key resources, to obtain firm assets from advanced economies, and to seek overseas opportunities with an international vision.
28 citations
TL;DR: This paper tested the exports to China-led growth and imports from China-Led growth hypotheses using Toda-Yamamoto's version of Granger non-causality combined with Johannes's cointegration and bootstrap diagnostic tests and found that Africa might benefit from China's growth through technology-embodied capital good imports.
Abstract: This paper tests the exports to China-led growth and imports from China-led growth hypotheses using Toda-Yamamoto's version of Granger non-causality combined with Johannes's cointegration and bootstrap diagnostic tests. The findings seemingly downplay the importance of the export-led growth hypothesis while suggesting that Africa might benefit from China's growth through technology-embodied capital good imports. In this sense, the findings support recent views that the gains from global trade depend less on the mere effects of trading than on the ability of countries to appropriately position themselves along the global value chain.
20 citations
TL;DR: Wang et al. as discussed by the authors reviewed recent developments and problems of corporate governance in Chinese banks and highlighted the need for an effective corporate governance system for the Chinese banking industry to gauge the success of the banking reform and to inspire market confidence.
Abstract: Recent developments and problems of corporate governance in Chinese banks are reviewed. The central government has tried to improve corporate governance, but China still has a "market economy with socialist characteristics." Key industries, such as banking, are firmly controlled by the state, and their leaders are appointed by the state. The China Banking Regulatory Committee was established in 2003 to regulate and monitor banks, but transparency remains elusive in the banking industry. An effective system of corporate governance is necessary for the Chinese banking industry to gauge the success of the banking reform and to inspire market confidence.
17 citations
TL;DR: This paper investigated the determinants of non-agricultural employment and income and how they contribute to income inequality using the China Household Income Project (CHIP) 2002 survey data and a three-step decomposition approach.
Abstract: Nonagricultural income has become an important source of rural household income in China and has brought about wide inequality in rural areas. This paper investigates the determinants of nonagricultural employment and income and how they contribute to income inequality using the China Household Income Project (CHIP) 2002 survey data and a three-step decomposition approach. Our results indicate that educational inequality accounts for 9 percent and 36 percent, respectively, of wage and self-employment income inequality, implying that educational inequality plays a substantial role in nonagricultural income inequality. The results also show that community characteristics explain much inequality in wage and self-employment income, indicating that local development is important in the determination of nonagricultural income inequality.
16 citations
TL;DR: Li et al. as mentioned in this paper examined the economic performance of China's human capital, adjusted by mortality and interprovincial migration figures, and found that skilled human capital can be improved by increasing the amount of secondary school education.
Abstract: Provincial data are used to examine the economic performance of China's human capital, adjusted by mortality and interprovincial migration figures. The perpetual-inventory approach is used to compile China's human capital, which is further decomposed into skilled, unskilled, and different educational endowments. Statistical estimates are extended to the performance of four regions. The various human capital indicators are examined with different infrastructure variables. The empirical results show that human capital endowed with higher education is scarce across provinces, but skilled human capital can be improved by increasing the amount of secondary school education. Consideration of openness factors shows that foreign direct investment is complementary to the level of human capital endowed with higher education.
16 citations
TL;DR: In this paper, the authors analyze corporate governance in Russia based on a study of the relationships between firms and banks, firms and capital markets, firm and government, and, within firms, between owners, management, and employees.
Abstract: This article analyzes corporate governance in Russia based on a study of the relationships between firms and banks, firms and capital markets, firms and government, and, within firms, between owners, management, and employees. In addition, a few important aspects of corporate governance in Russia and China are compared. Our descriptive study suggests that Russia's corporate governance is neither German-Japanese style nor Anglo-American style. Unlike in China, where enterprise reform is developing toward the Anglo-American style of corporate governance, Russia has stronger features of the German-Japanese style of governance because of its heavy bank involvement.
16 citations
TL;DR: Wang et al. as discussed by the authors reviewed and synthesized the recent literature on Chinese accountancy issues, highlighting the leading individual and institutional contributors, the major focus and research methods of their studies, and the journals, articles, and scholars exerting the greatest influence upon research of accounting in China.
Abstract: Over the past two decades, economic reforms have significantly changed the economy and accountancy in China. As the planned centralized economy is gradually replaced by a market-driven economy, the the profession of accountancy is emerging and playing an increasingly important role. This paper reviews and synthesizes the recent literature on Chinese accountancy issues. It highlights the leading individual and institutional contributors, the major focus and research methods of their studies, and the journals, articles, and scholars exerting the greatest influence upon research of accounting in China.
15 citations
TL;DR: In this article, the authors examined the history, trends, geographical and sectoral preferences, and policy issues of foreign direct investment (FDI) in Russia and concluded that most of the obstacles to FDI in Russia are institutional.
Abstract: This article examines the history, trends, geographical and sectoral preferences, and policy issues of foreign direct investment (FDI) in Russia. Most of the obstacles to FDI in Russia are institutional. The following institutional aspects are reviewed: government restrictions, trade-related investment measures (TRIMs), customs, bureaucracy, legal FDI framework, labor issues, taxation, partnerships with firms, corruption, and crime. The discussion ends with a comparative note on FDI in China.
13 citations
TL;DR: In this article, the authors evaluate the effectiveness of China's post-WTO banking reforms, concluding with a description of the challenges facing China's banking sector, including the noticeable capital constraints facing small and medium-size private enterprises, particularly those in rural areas.
Abstract: Banking reform since China's accession to the World Trade Organization (WTO) has accomplished unprecedented positive results, but its long-term success rests on whether the state-owned commercial banks (SOCBs) can continue to improve their asset quality and corporate governance. To reach this end, the central government has to further diminish its influence on the operation of SOCBs and allow the state banks to be governed by market discipline. Current reforms may not be full-fledged enough to sustain China's future economic development, reflected by the noticeable capital constraints facing small and medium-size private enterprises, particularly those in rural areas. The commercialization of specialized banks (SBs) in 1994, which paved the way to China's WTO accession, will be briefly examined along with an evaluation of the effectiveness of China's post-WTO banking reforms, concluding with a description of the challenges facing China's banking sector.
TL;DR: In the past, rural finance was neglected as discussed by the authors, but China has utilized its abundant capital to recapitalize rural credit cooperatives, increase financing for agricultural commodity procurement, and promote micro-lending on an unprecedented scale.
Abstract: In the past, rural finance was neglected. Now China has utilized its abundant capital to recapitalize rural credit cooperatives, increase financing for agricultural commodity procurement, and promote microlending on an unprecedented scale. It has begun experiments in creating new village banks, loan guarantee companies, and formalizing informal lenders. Restructuring of institutions appears to have addressed some of the most egregious problems that existed in earlier decades, but the basic structure of the rural financial system is unchanged. The overarching theme of reforms appears to be to push more capital into rural areas.
TL;DR: The authors found that past migration substantially influences current migration, confirming that migrants strongly prefer moving to provinces with relatively large migrant enclaves, and that higher levels of foreign direct investment (FDI) in the target destination were found to stimulate inmigration, particularly during the 1990s.
Abstract: During the 1980s and 1990s, interprovincial migration in China surged concurrently with three major developments in the economy: deregulation of migration, rapid growth, and substantial increases in foreign and domestic investments. To what extent did these developments influence the changes in interprovincial migration? In this study, data from the National Census and National Bureau of Statistics are used to estimate a more extensive modified gravity model compared to previous research. It is found that past migration substantially influences current migration, confirming that migrants strongly prefer moving to provinces with relatively large migrant enclaves. Greater levels of foreign direct investment (FDI) in the target destination were found to stimulate inmigration, particularly during the 1990s. The deep economic reforms made in the 1990s changed the structure of migration significantly.
TL;DR: In this paper, Li et al. discuss pension system reforms in China and Russia, which have expanded coverage, increased portability, reduced inequity, and improved labor mobility of pensions.
Abstract: This paper discusses pension system reforms in China and Russia. Before the reforms, both countries had pay-as-you-go pension systems, with limited coverage, inequality across sectors, lack of portability, and unsustainable financing. Pension reforms, begun in China in 1984 and Russia in 1997, aimed to establish a three-pillar system: (1) defined benefits, (2) mandatory funding, and (3) supplementary pension. The reforms have expanded coverage, increased portability, reduced inequity, and improved labor mobility of pensions. However, the two countries face many challenges, including aging populations, a double burden on active workers, and immature capital markets.
TL;DR: In this paper, the authors identify the determinants of rural women's migration decisions with a sample of 335 migrant women and 204 non-migrant women in sixteen cities of the Yangtze delta in 2006.
Abstract: This study seeks to identify the determinants of rural women's migration decisions with a sample of 335 migrant women and 204 nonmigrant women in sixteen cities of the Yangtze delta in 2006. We study these determinants from two dimensions: individual factors and household factors. The logistic model analysis reveals that education, especially the education of their children, is the most significant determinant of rural women's migration decision. It is suggested that the government should give priority to the education of migrant women and their children.
TL;DR: In this paper, a case study of a private credit-reporting agency, established in 2000, is studied, and the progress the People's Bank of China has made in establishing a unified national credit reporting system since 2004 is discussed.
Abstract: A more complete credit-reporting system has to evolve in China in order to better manage risk and reduce the amount of nonperforming loans. The rationale for having a credit-reporting system is outlined through a review of the literature on asymmetric information. A case study of a private credit-reporting agency, established in 2000, is studied. This was the first one in Chengdu and one of the earliest in China. In addition, there is a discussion of the progress the People's Bank of China has made in establishing a unified national credit-reporting system since 2004. China has made much progress in this sphere and at present operates the largest credit-reporting database in the world. There is, however, still plenty of scope for improvement, including better cooperation between public and private credit-reporting services, with a view to providing a more streamlined product.
TL;DR: In this article, the authors compared tax reforms and current tax systems in China and Russia, and found that the tax share of the gross domestic product (GDP) is substantially higher in Russia than in China.
Abstract: This paper compares tax reforms and current tax systems in China and Russia. In both countries, earlier tax reforms aimed at providing incentives to state-owned enterprises (SOEs) to improve productivity. In the 1990s, China and Russia established market-oriented tax systems, and both experienced a decline in tax revenues. Entering the new century, China adopted an increased-spending fiscal policy, while Russia adopted a tax-cut policy to stimulate economic growth. Both countries have similar value-added tax systems, but their personal and corporate income tax structures and social security systems are substantially different. The tax share of the gross domestic product (GDP) is substantially higher in Russia than in China. Russia is expected to continue its tax-reduction policy, and China is also considering major tax reforms.
TL;DR: In this paper, the authors investigated the evolution of the ABC from its reestablishment in 1979 as a state bank to the announcement of shareholding reform toward the end of 2008, and examined the meaning and implications of the reforms and how the ABC has been finding ways, by means of local experiments, to reconcile policy and commercial objectives.
Abstract: This paper investigates the evolution of the ABC, from its reestablishment in 1979 as a state bank to the announcement of shareholding reform toward the end of 2008. The ambivalence of the government in reforming the ABC and the limitations of the reforms are studied. The concluding analysis examines the meanings and implications of the reforms and discusses how the ABC has been finding ways, by means of local experiments, to reconcile policy and commercial objectives.
TL;DR: Wang et al. as discussed by the authors proposed a more refined regulatory framework and a stronger institutional investor base are needed and are prerequisites for a well-functioning warrants market in China.
Abstract: After the stock reforms in 2005, China's equity warrants market became the second-largest in terms of trading value after Germany and surpassed Hong Kong in 2006. The growth of the warrants market in China has been constrained by the gradual expiration of reform-related warrants, excessive speculation, and lack of understanding of the warrants market by its participants. The mechanism for creating special warrants designed as a transition to the development of covered warrants has been under hot debate. A more refined regulatory framework and a stronger institutional investor base are needed and are prerequisites for a well-functioning warrants market.
TL;DR: In this paper, the authors present the latest global trends of auto supply chains in the demand-supply framework and their link to the Chinese auto industry, and some target-oriented macro and micro-policy implications are provided for supply chain management in the further development of Chinese auto supply chain.
Abstract: This paper presents the latest global trends of auto supply chains in the demand-supply framework and their link to the Chinese auto industry. As emerging players in the world market, Chinese auto enterprises have experienced rapid growth for the past two decades. This has brought many problems, including a severe bottleneck of auto supply chains in the internationalization process. Some target-oriented macroand micro-policy implications are provided for supply chain management in the further development of Chinese auto supply chains.
TL;DR: In this article, a review of Russia's foreign trade policy and trade-related issues in its World Trade Organization entry negotiations is presented, focusing on Russia's economic structure, corporate governance, and market access to agriculture and service sectors.
Abstract: This paper reviews Russia's foreign trade policy and trade-related issues in its World Trade Organization entry negotiations. The disputes between Russia and its major trade partners are analyzed. The discussion focuses on Russia's economic structure, corporate governance, and market access to agriculture and service sectors. Russia's experience is compared with China's entry application to the WTO, and the disputes hindering the final agreement are discussed. Suggestions are made for Russian policy-makers to learn from China to structurally reform Russia's economic and trade regimes to meet WTO requirements and to promote its economic growth and global economic integration.
TL;DR: In this paper, the authors examine the revenue sources local governments may use to finance the costs of rapidly expanding infrastructure and provide local public services and examine the potential impacts of this policy change on housing prices and patterns of housing development.
Abstract: Urban areas in several regions of China are exploding with growth and expanding at a rapid pace. This article examines the revenue sources local governments may use to finance the costs of rapidly expanding infrastructure and provide local public services. Starting with an examination of current urban development policy, recent reform proposals for urban land development and housing construction tax and fee reforms are studied. The primary focus is on the policy debate as to whether the existing system of multiple real estate taxes and fees, often applied once at the time of house purchase, should be converted into a unified real estate tax requiring annual payments. The potential impacts of this policy change on housing prices and patterns of housing development are analyzed.
TL;DR: In this article, the main features and determinants of EU antidumping investigations against China were identified, based on the binomial probit, and empirical analyses of the factors behind the anti-dumping charges during 1998-2006 were conducted.
Abstract: The European Union (EU) has become China's largest trade partner. Although China is the EU's second-largest trading partner and its largest source of imports, trade frictions between them have been increasing dramatically. In fact, China has become the major target of EU antidumping investigations in recent years. This paper attempts to identify the main features and determinants of EU antidumping investigations against China. EU antidumping policies and rules will be studied, then, based on the binomial probit, empirical analyses of factors behind the EU antidumping charges during 1998-2006 will be conducted. Since China's accession to the World Trade Organization (WTO) in 2001, EU antidumping charges against China have risen significantly relative to its other trade partners. Many more antidumping charges were made regarding the chemical and metal industries than any other industries. Products or industries which have previously been antidumping targets seem to have a greater chance of being reinvestiga...
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TL;DR: Wang et al. as mentioned in this paper investigated features of migrant workers and their city counterparts regarding income, employment, social support, housing, most-needed government assistance, and reasons for migration.
Abstract: Since the late 1970s, many employees of state-owned enterprises have been laid off, and more and more rural people have migrated to urban areas. Many laid-off and migrant workers have become the urban poor. This paper discusses the general situation of the urban poor in China by examining how many there are, how poor they are, who they are, and what creates their situation. Using data from a January 2007 survey on 1,641 relatively low-income households in Changsha, the paper investigates features of migrant workers and their city counterparts regarding income, employment, social support, housing, most-needed government assistance, and reasons for migration. Based on the empirical findings, the paper gives some policy recommendations.
TL;DR: In this article, the authors assessed macroeconomic interdependence between China and Taiwan in terms of an array of output, price, money, and stock price measures for each economy.
Abstract: Macroeconomic interdependence between China and Taiwan is assessed in terms of an array of output, price, money, and stock price measures for each economy. Sizeable simple correlations between these variables are accompanied by significant bidirectional Granger causality in many cases. Further evidence of interdependence arises from impulse response and variance decomposition analysis. As expected, the effects of mainland China variables on Taiwan appear to be stronger than the reverse. The indicated responses of the Taiwanese M2 money supply to developments in China are particularly noteworthy as M2 was generally the central bank target variable over the sample period.
TL;DR: In this article, the effect of capital formation on economic growth was investigated empirically in western China and compared with the eastern and central regions, finding that local-fiscal capital expenditure and central-government investment have a significant positive effect on growth in the central and western regions.
Abstract: Employing the Douglas production function, the effect of capital formation on economic growth is investigated empirically in western China and compared with the eastern and central regions. Regional inequality is viewed to be closely related to capital formation, such as local-fiscal expenditure, central-government investment, loans, equity financing, foreign direct investment (FDI), and private investment. The west is generally weaker in capital formation than the eastern and central regions. Findings indicate that local-fiscal capital expenditure and central-government investment have a significant positive effect on growth in the central and western regions. Loans have no significant effect on growth in any of the regions. Effects of equity financing are significant for growth in the eastern and central regions, but not in the west. The link between FDI and growth is stronger in the west than in central China, but weaker than in the east.
TL;DR: Wang et al. as discussed by the authors analyzed the mobilization efficiency of VC in China and found that the dearth of venture capitalists, absence of appropriate exit channels, and lack of open, active, mature, and stable equity-driven capital markets result in low mobilization efficiency in China's VC markets.
Abstract: This paper aims to analyze the mobilization efficiency of venture capital (VC) in China. It has been found that the dearth of venture capitalists, absence of appropriate exit channels, and lack of open, active, mature, and stable equity-driven capital markets result in low mobilization efficiency in China's VC markets. Therefore, government should take an appropriate role to facilitate VC development by educating entrepreneurs, providing a more favorable entrepreneurial environment, thereby reducing time, financial and opportunity costs, encouraging private investment funds to absorb the country's tremendous savings, and encouraging institutional investors to further develop capital markets.
TL;DR: Li et al. as discussed by the authors examined the effect of local government protection on risk management in Chinese listed firms and found that firms with high distress costs pay little attention to risk management. But in the long run, this protection will destroy a firm's competitiveness and reduce its value accordingly.
Abstract: Corporate finance theory holds that risk management increases firm value by reducing the costs of financial distress, agency costs, and taxes. This hypothesis is examined by conducting empirical research on Chinese listed firms. Unlike previous studies, which focused mainly on the corporate governance system in China, this study pays more attention to protection within the context of local government and analyzes its effects on decisions regarding a firm's risk management. In contrast to what the theory claims, this study shows that firms with high distress costs pay little attention to risk management. Furthermore, risk-management decisions seem to have no clear impact on firm value. This phenomenon can be attributed to protection by local government, which lets very few listed firms in China go bankrupt. But in the long run, this protection will destroy a firm's competitiveness and reduce its value accordingly.
TL;DR: In this paper, migration, income inequality, and the urban poor in China are discussed, with a focus on urban poor migration and income inequality in the Chinese economy and urban areas.
Abstract: (2009). Migration, Income Inequality, and the Urban Poor in China. The Chinese Economy: Vol. 42, No. 4, pp. 3-6.
TL;DR: In this paper, the impact of Chinese rural taxation reform (RTR) on farm household income is investigated, using panel data collected from nearly 1,000 farm households in fifteen villages in the Yangtze river delta (YRD) area between 1995 and 2005.
Abstract: In this study, the impact of Chinese rural taxation reform (RTR) on farm household income is investigated, using panel data collected from nearly 1,000 farm households in fifteen villages in the Yangtze river delta (YRD) area between 1995 and 2005. The results from fixed-effect regression show that RTR had a significant impact, increasing farmer income by 6.82 percent. This increase is much more than the direct income increase brought about by an exemption from the agricultural tax. When the dynamic impact of RTR on farm household income was examined, it was found that the most significant income increase occurred in the first three years after the execution of the new tax policy.