The Journal of World Economy 2023, No.8
Intelligent Manufacturing and Green Development: From the Perspective of Chinese Industrial Firms Importing Robots
Lin Xi; Liu Qiren; Feng Guimei
Abstract：As China enters the stage of high-quality economic development, intelligent manufacturing and green development are becoming an important trend. In this study, robots, pollution, energy and other factors are introduced to construct a model of heterogeneous firms to theoretically analyse the impact and mechanism of the application of robots on pollutant emissions at the firm level. Based on this, data of Chinese industrial firms are used, and the inverse probability-weighted (IPW) matching and the difference-in-differences (DID) method are combined to perform the empirical tests. The results indicate that the application of robots significantly reduces the intensity of firms’ emissions and the level of polluting emissions. The analysis of the mechanism reveals that the application of robots not only improves the production technology, which reduces the energy intensity, but also decreases the emission levels per unit of energy consumption through the technological reduction effect. In the case of domestic firms, pollution-intensive industries and inland provinces, the reduction effects derived from the application of robots turn out to be greater. Taken together, this paper provides policy implications for China in terms of intelligent manufacturing and green development.
Key words：application of robots, pollutant emissions, industrial firms, IPW-DID
Informationisation of Government Services and the Level of Basic Public Services
Huang Shoufeng; Zhao Yan
Abstract：As an important means of enhancing the modernisation of the national system and governance capacity, information technology (IT) has offered new opportunities to improve the capacity of the government’s basic public services. This paper examines the impact of informationisation of government services on the level of basic public services in China using the difference-in-differences (DID) method with the National Pilot Policy on Information for Public Welfare as an exogenous shock. The study finds that the informationisation of government services can significantly improve the level of basic public services by improving the efficiency of these services, promoting urban innovation and facilitating the improvement of the industrial structure. The effectiveness of this policy is further weakened by the increase in fiscal and economic growth pressure but strengthened by the improvement in fiscal transparency. The paper also finds that informationisation of government services helps to promote the equalisation of basic public services and improve residents’ satisfaction with basic public services.
Key words：informationisation of government services, basic public services, national pilot policy on information for public welfare
Target-Driven Innovation: Micro-Evidence from Local Government Annual Reports
Zheng Shilin; Cui Xin; Yao Shouyu; Cheng Feiyang
Abstract：Local government innovation target setting has become an important governance pattern for fostering China’s innovation-driven development. This paper investigates the impact of local governments’ R&D investment targets-extracted manually from their annual reports-on the innovation behavior of local listed firms. The results show that the R&D investment targets set by local governments significantly enhance corporate innovation. Mechanism analysis show that government R&D subsidies, implementation of preferential taxation, credit resource support, and talent structure optimization are the main channels through which R&D investment targets promote corporate innovation. Further research indicates that the long-term plan as well as the continuity of R&D investment targets contribute to further improving corporate innovation. However, our results also indicate that excessive amplification of R&D investment targets damages innovation quality in the medium and long term. This study has policy implications for China to improve its scientific and technological innovation system and enhance the overall efficiency of the national innovation system.
Key words：government annual report, R&D investment target, corporate innovation
China’s Innovation Dilemma Revisited: The New Perspective of Technological Innovation Quality
Ye Chusheng; Sun Wei
Abstract：China is facing an“innovation dilemma”of rapid growth in R&D investment and slow improvement in total factor productivity (TFP). This paper attempts to re-analyse this issue from the perspective of technological innovation quality. First, it analyses the technological innovation quality connotation in depth and puts forward and tests the corresponding new measurement method based on text mining. Then, taking the technological innovation quality as a starting point, the paper examines the relationship between the technological innovation quality and TFP forward and government-led R&D resource allocation backward, forming a logical chain from“government support for innovation”, “R&D resource allocation”and“technological innovation quality”to“TFP”. Using matching data of Chinese A-share listed manufacturing enterprises and patents from 1998 to 2013, it is found that there is a serious mismatch between the distribution of government support for innovation and technological innovation quality at the industrial, ownership and regional levels, which significantly inhibits the improvement of corporate TFP. Analysis of the mechanism reveals that mismatch inhibits TFP by reducing the technological innovation quality. The heterogeneity analysis indicates that the inhibitory effect is more pronounced in capital-intensive industries enterprises, state-owned enterprises and Eastern enterprises. Further analysis suggests that corrective policies targeting entities with a high level of mismatch can effectively alleviate the negative impact. This paper provides a significant baseline for the government to adjust innovation policies and lead the efficient allocation of R&D resources.
Key words：technological innovation quality, government support for innovation, resource mismatch, total factor productivity(TFP)
Economic Convergence and Environmental Disparities: Evidence from the Western Development Program
Ma Qianqian; Chen Shiyi
Abstract：Place-based policies should promote regional economic development and reflect the ideology of sustainable green development, as required by the new development philosophy. Based on matching China’s Industrial Enterprise Pollution Database and China’s Industrial Enterprise Database, this paper employs the difference-in-difference strategy to systematically evaluate the Western Development Program (WDP) ’ s effects on economic growth and environmental pollution. The study provides convincing evidence that the WDP effectively bridges the quantitative gap in economic growth between regions, with the industrial value-added of firms in the western region increasing. However, the implementation of the WDP has led to the deterioration of environmental pollution. In addition, this paper emphasizes that strengthening environmental regulation, improving the level of urbanization, and upgrading the industrial structure can alleviate the pollution effect generated by the WDP. Furthermore, mechanism analysis shows that environmental pollution caused by the WDP is dominated by scale effect rather than technique effect. Various preferential policies achieve the expansion of economic scale by reducing taxes, increasing firms’ profits, lowering firm exit, and attracting firms to settle. The results reveal that the WDP causes a contradiction between economic convergence and environmental disparities. Therefore, considering that the Chinese economy is transitioning from high-growth to high- quality development, it is essential to incorporate environmental pollution into the analysis framework of the place-based policy evaluation, which ultimately is the most important contribution of this research. In the future, rational place-based policy-making should balance economic growth and environmental protection to achieve the target of high-quality development.
Key words：economic growth, environmental pollution, place-based policies, environmental regulations
Labour Protection, Dependence on Specific Skills and the Rise of Industrial Robots
Jiang Wei; Ji Ping; Zhao Min
Abstract：Focusing on workforce-specific skills, this paper investigates how differences in labour protection across countries shape patterns of increasing industrial robots. First, a decision-making model for the workforce-specific skill acquisition and firm robots is constructed based on a Nash game model with incomplete information, and the theoretical relationship between labour protection and the emergence of industrial robots is established from two different perspectives: the specific effect of skills improvement and the robot substitution effect. Subsequently, drawing on cross-country data from between 1993 and 2019, a generalised difference-in-differences (DID) model is constructed and the impact of labour protection on the increase in industrial robots is identified. The results of the research reveal that the impact of labour protection on industrial automation is not significant. However, clear evidence is provided that the adoption of industrial automation is significantly reduced in industries with greater reliance on specific skills, and that labour protection inhibits the substitution of labour by robots through the effect of specific skills. Workforce-specific upskilling also proves to be an important way to mitigate the impact of industrial automation on the labour market. After considering variable measurement bias, endogeneity issues, and the exclusion of other competing hypotheses, the conclusions remain robust. Finally, focusing on the Chinese context, the paper tests the applicability of the theoretical model in China using the Labour Contract Law implementation as a quasi-natural experiment to explore the impact of labour protection on the rise of industrial robots in China at both industrial and corporate levels.
Key words：labour protection, specific skills, general skills, robots, automation
Elderly Care Services and Mental Health: Evidence from the Pilot Policies of Home and Community Care Services for the Elderly in China
Jia Kaidong; Xia Yiming; Zhao Guochang
Abstract：China’s population is aging rapidly and the mental health of the elderly is poor. This paper examines the impact of improved home and community care services for the elderly on their mental health using data from the China Health and Retirement Longitudinal Study (CHARLS) between 2011 and 2018 and the difference-in-differences (DID) method. The results suggest that pilot policies aimed at home and community care for the elderly have significantly improved their mental health. Mechanism analysis suggests that the elderly in the pilot cities enjoy more healthcare services and daily companionship, which helps explain the policy effect on mental health. The heterogeneity analysis reveals that the policy effect is driven by urban residents, those with high income, aged between 50 and 59 years and aged over 70 years.
Key words：home and community care services for the elderly, elderly mental health, difference-in- differences
Hurting the Innocent: The Role of Bond Mutual Funds in Propagating Idiosyncratic Bond Defaults
Wu Yuhui; Liu Xiaoling; Qi Shusen
Abstract：Could idiosyncratic bond defaults trigger a systematic financial crisis? Using mutual funds’ bond holding data, this paper studies how idiosyncratic bond defaults are propagated by bond mutual funds’ behavior, causing potential systematic risks. Bond mutual funds invest in illiquid assets while providing liquid claims to shareholders. Therefore, when a portfolio bond defaults, bond mutual funds experience significant redemptions and liquidity needs and, as a result, they have to sell their holdings of non-defaulted corporate bonds. Selling pressure leads to a 9.26% increase in credit spreads on these non-defaulted bonds. On the other hand, it is found that funds with the same bond holdings can further amplify this direct contagion effect, which has negative impacts on the entire bond fund industry and the corporate bond market. These findings suggest that bond mutual funds with high liquidity needs may act as a transmission mechanism that explains idiosyncratic risk contagion that may ultimately become systematic.
Key words：bond mutual funds, bond defaults, credit spreads, contagion
The Effects of Relative Income on Donations to Public Goods and Charity: An Experimental Study with Real-World Projects
Wang Xianghong; Wu Jiani
Abstract：The differences between the nature of public goods and that of charity are often overlooked. This study examines how the reference point effect induced by relative income gives rise to different behaviour in these two types of donation. In the experiment, we use environmental protection as a public goods setting and poverty alleviation as a charity setting in order to explore the donation decisions of low- and high-income individuals in groups with different relative income. For the robustness test, we conduct corresponding simulation experiments in the laboratory. Theoretical analysis indicates that relative income affects contribution to public goods through conditional cooperation, and affects donation to charity through inequality aversion. The experimental results show that, in the public goods setting, given the level of absolute income, the decrease in the relative income makes individuals increase their contribution through the reference effect of others. In the charity setting, the amount of individual donations is affected by absolute income mainly and is affected by relative income through the belief about other members’ donations. This study provides a better understanding of the behaviour of donations in public goods and charity under the environment of relative income, and this has notable implications for policies related to tertiary distribution, fund raising, and community planning.
Key words：donations, public goods, charity, relative income, reference point