The Journal of World Economy 2022, No.10
Educational Poverty Alleviation and Human Capital Accumulation: Evidence, Mechanisms and Policy Implications
Song Hong; Luo Jigang; Huang Wei
Abstract：This paper investigates the effect of the targeted educational poverty alleviation program on children's human capital accumulation, and we have following findings. First, the educational poverty alleviation policy significantly improves the cognitive abilities and some non-cognitive abilities of adolescents in the compulsory education stage in poverty-stricken areas. Second, the mechanism of the policy is such that, in terms of public education, the policy promotes both physical investment and investment in human resources; in terms of family education, the policy encourages families to increase their educational expenditure and savings for the next generation, which favours the accumulation of human capital for adolescents. However, the perspectives and methods of family education have not changed significantly. Third, the policy benefits children from disadvantaged family backgrounds the most. It indicates that the policy accurately promotes education and the accumulation of human capital among the most disadvantaged groups, which is in line with the objective of “targeted poverty alleviation”. In the new stage of economic development, this paper provides inspiration for the design of relevant programs and policies to support educational poverty alleviation programs.
Key words：education, poverty alleviation, human capital
JEL codes：I21; I28
Chinese Enterprise Innovation and Skills Upgrading: An Analysis from the Perspective of the Productivity Spectrum Effect
Song Jian; Zheng Jianghuai
Abstract：This paper develops an innovative decision-making model for heterogeneous enterprises in a monopolistic competitive market, and empirically uses the ”National Innovative Enterprise Survey Database of China” from 2008 to 2014 to study the innovation micro-mechanism that promotes labour skills upgrading. The study finds that Chinese enterprise innovation has increased the demand for high- skilled labour and promoted the upgrading of labour skills in enterprises. The robustness of the results is considered by replacing innovation and skill upgrading identification criteria and replacing indicators, combining the industrial enterprise innovation questionnaire and the World Bank enterprise questionnaire database. The findings of the study are significant. Further study shows that the” Productivity Spectrum Effect” is an important channel for innovation to upgrade skills, and it is most obvious in high-margin markets or industries. At the same time, in a market with fierce innovation competition and increased market power, the upgrading of enterprise skills is significant. This study adds new knowledge, supporting the acceleration of the cultivation of high-skilled innovative talents and optimising the structure of enterprise labour skills, as well as providing useful information for China's ”14th Five-Year Plan” to enhance the technological innovation capabilities of enterprises and develop skills in China.
Key words：enterprise innovation, labour skill upgrading, productivity spectrum, market competition
JEL codes：L11; D22; O31; J21
Peer Effect of OFDI Decision-Making on Corporate Trade Networks
Sun Puyang; Liu Yili; Jiang Dianchun
Abstract：Using transaction datasets between listed companies and their customers, this paper investigates whether corporate OFDI (outward foreign direct investment) information is spilled over through the corporate trade network to produce a significant peer effect on the OFDI. The work draws the following conclusions. 1) The OFDI experience of network peers in a given country can significantly encourage companies to make OFDI decisions in that country, and this promotion effect is attenuated by the increase in the network distance between companies. 2) After excluding some mechanisms that are more likely to be explained by upstream and downstream supply chain support, this paper verifies that the peer effect of the OFDI network is mainly due to the learning effect generated by the inter-company information transfer. 3) The information transfer effect in the trade network presents a high degree of heterogeneity among companies; this effect is more prominent when the number of peers in the trade network is smaller, communication between companies in the trade network is more frequent, the market capacity of the companies is stronger, the companies are in the same industry, the companies are larger and financed with foreign funds. The conclusions of this paper provide guidance and suggestions on how to take full advantage of the information transmission function of the domestic corporate trade network and realise the coordinated development of corporate investment decision-making and OFDI.
Key words：corporate trade network, OFDI (outward foreign direct investment), peer effect, learning effect
JEL codes：D83; D85; F21
Quantifying Trade and Welfare Effects of Consumption Goods Tariff Reduction
Liu Yalin; Dai Mi
Abstract：A central issue in China's trade policy in recent years is to promote imports to meet consumers' growing demand for commodities. In July 2018, China lowered the most-favoured-nation (MFN) tariff rate on 1,588 imported consumption goods. This paper estimates the impact of this policy on imports and consumer welfare, using monthly customs data from 2017 to 2019 in China. The results reveal that: (1) tariff reduction significantly promoted the import of consumption goods; (2) the tariff reduction has almost no effect on tariff-exclusive prices, i.e., the tariff pass-through rate is nearly complete; (3) the tariff reduction lowered China's import prices for consumption goods by about 3%, increasing by consumer welfare by approximately 40.2 billion Yuan annually; and (4) the proportion of consumption goods in total imports increased by 0.35 percentage points, or the increase rate is 4%, due to the tariff reduction. Our analyses suggest that the reduction of tariffs on consumption goods has substantially improved consumer welfare in China and facilitated to change the status quo of a low proportion of consumption goods in China's imports.
Key words：consumption goods, tariff reduction, consumer welfare
JEL codes：F74; F745
State Capital Budget Expansion and SOEs'Value Enhancement: Evidence from A Profit Extraction Reform in China
Xi Penghui; Pan Jianping; Zhang Xunchang
Abstract：Increasing SOEs' profit extraction ratio is the basic direction of China's current state capital budget reform. However, there is currently no clear empirical evidence on whether this will impede SOEs' value enhancement and thus delay the reform process. To answer this question, we examine the impact of a series of profit extraction reforms of central SOEs that began in 2007. We find that profit extraction reforms reduce SOEs' profit scale. The mechanism test shows that SOEs' profitability is not significantly affected, while the decrease in profits is mainly due to SOEs' real earnings management. This work has important implications for the reform of China's state capital budget. On the one hand, the ratio of profits turned over by SOEs can continue to be increased and, therefore, the scale of the state capital budget can be expanded. On the other hand, the strengthening of the performance evaluation of SOEs and the real effect of the actual profit extraction ratio must enter into force.
Key words：state-owned capital management budget, profit extraction ratio, liquidity crisis, real earnings management
JEL codes：H61; L32; M41
The Impact of Non-Tariff Barriers on China's Import Diversification
Shen Guobing；Shen Binchao
Abstract：Based on domestic and product trade models and the estimation of non-tariff barriers to China's imports, this paper studies the impact of reducing non-tariff barriers to imports on China's import diversification expansion. The results of the study indicate that non-tariff barriers to China's imports are mainly concentrated in prepared food, animal and vegetable products, shoes, hats and feather products, etc.; among the different sources of import, non-tariff barriers to China's imports from Canada, Australia, Thailand and Vietnam are shown to be relatively high. Reducing non-tariff barriers to imports can significantly promote the diversification of China's import sources, while significantly improving the diversification of China's import varieties. In addition, by reducing non-tariff barriers to imports to increase the diversification of import sources, the promotional effect on homogeneous and capital products is shown to be greater than that on differentiated, and final and intermediate products respectively; the promotional effect on labour, resources and primary products is greater than that on low- , medium- and high-tech manufactured products. CPTPP members also play a greater role in promoting the diversification of China's expanding sources of import than other economies.
Key words：non-tariff barriers, iceberg trade cost, diversification of import sources, diversification of import products, CPTPP
JEL codes：F13; F14; F15
Asset-Backed Securitization and Idle Asset Revitalization: Evidence from Non-Financial Firm Asset Securitization
Zhu Xiaoneng；Su Hao；Hao Yijun
Abstract：To promote the transformation of development models and improve the high-quality development through ”idle assets revitalization”, China's financial authorities have re-enabled the asset- backed Securitization (ABS) issuance that has been suspended for many years. Naturally ABS reduces firm leverage. However, there is no empirical evidence on whether ABS revitalizes idle assets as expected. For the first time this paper collects data on non-financial firms' ABS activities and investigates the link between ABS activities and idle asset revitalization. Empirical results show that ABS improves operation efficiency and reduces credit risk. The effects are achieved by improving the balance sheet and repairing firm credit. These results indicate that ABS revitalizes idle assets to an extent. The findings remain unchanged after robustness tests including sample matching, group experiments, and explanatory variables replacement. This paper provides the first piece of empirical evidence on the effect of Chinese firms' ABS activities on idle asset revitalization, thus providing a valuable reference for high-quality real economic development policies.
Key words：idle asset revitalization, asset-backed securitization (ABS), balance sheet, credit repair
JEL codes：G10; G30; O16
Swing with Wind or Remain Firm? A Study on the Central Performance Appraisal and Local People's Livelihood Governance
Zhao Yonghui; Luo Yu
Abstract：Based on the progressive practice of local performance appraisal reform since 2006, this paper evaluates the impact of central performance appraisal of local government motivation on economic development and livelihoods by using a staggered differences-in-differences (DID) model. The empirical results show that the reform significantly promotes the efforts of local officials on livelihood, such as education and medical care, while it also restrains the preference for “growth championship” to a certain extent, which highlights the strong effect of the scientific perspective on development. From the perspective of interregional interaction, there is a significant strategy imitation in different jurisdictions between local officials in relation to people's livelihood governance motivation, and the “assessment” signal effectively promotes officials' governance efforts among competitive regions. The Analysis of the mechanism also implies that local officials primarily drive livelihood governance through internal political promotion, external regional competition and fiscal constraints. Regarding its actual effect, in general, the correction of the officials' governance motivation significantly affects local governments' decisions to invest in different types of public goods and effectively improve people's livelihoods in the field of social development. Our study provides empirical evidence and useful references for a subsequent adjustment and optimization of the officials' incentive mechanism in the assessment of local cadres.
Key words：centeral performance appraisal, people's livelihood governance, staggered differences- in-differences (DID) model
JEL codes：H11; H75; H77
Deleveraging for Bond Issuance: New Evidence of Leverage Manipulation
Li Xiaoxi; Yang Guochao
Abstract：This paper examines opportunistic leverage manipulation efforts by bond issuers in relation to bond offerings. The study argues that the distribution of corporate leverage is significantly disrupted near the regulatory threshold, demonstrating the corporate leverage manipulation phenomenon, and that bond issuers with stronger incentives to reduce book leverage will use more leverage manipulation prior to a bond offering, including the following potential channels: operating lease, perpetual bond issuance, land assets injection, and other receivables through government IOUs. In the long-term, leverage manipulation also leads to an increase in credit risks, but in the short-term, leverage manipulation leads to potential benefits, including inflated bond ratings and a decline in offering yield. Collectively, this study not only explores a new scenario of leverage manipulation in terms of bond issuance, but also provides novel evidence on the regulatory distortion effect caused by corporate opportunistic behaviour.
Key words：bond issuance, deleveraging, leverage manipulation, regulatory threshold
JEL codes：G18; G24; G32