A Bridge on Economic Issues between China and the World
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Misallocation, Selection, and Productivity: A Quantitative Analysis with Panel Data from China
Tasso Adamopoulos, Loren Brandt, Jessica Leight, Diego Restuccia, Jan 05, 2022We examine the distorting effects of China’s land institutions on aggregate agricultural productivity and other outcomes. We argue these distortions affect two key margins: (1) the allocation of resources across farmers (misallocation); and (2) the type of farmers who operate in agriculture (selection).
FinTech Adoption and Household Risk-Taking
Claire Yurong Hong, Xiaomeng Lu, Jun Pan, Dec 16, 2020China has experienced a rapid increase in FinTech penetration in the form of offline digital payments over the past decade. Using unique account-level data on consumption, investments, and FinTech usage from the Ant Group, we find that FinTech can lower investment barriers and help households move toward optimal risk-taking. Inferring individuals’ risk tolerance from their consumption volatility, we find that individuals who are more risk tolerant benefit more from FinTech advancement. Examining the enhancement...
Developing Credit Markets in Provinces Improves Innovation among Firms in the People’s Republic of China
Hua Shang, Quanyun Song, Yu Wu, Mar 28, 2018Our recent research finds that provincial credit market development, through improving credit allocation, enhances firms’ product innovation incentives and outcomes in the People’s Republic of China. We further show that firms’ credit constraints and performance are two channels through which credit market development affects the innovative capacities of firms. We suggest that in order to further promote firms’ innovations, China should encourage financial institutions to actively screen those firms who have good performance but face credit constraints.
Exporting out of Agriculture: The Effects of the China Shock in China
Jessica Leight, Jan 01, 2020This paper analyzes the effect of China's 2001 accession to the World Trade Organization on structural transformation at the local level, exploiting cross-sectional variation in tariff uncertainty faced by county economies pre-2001. Using a new panel of 1,800 Chinese counties from 1996 to 2013, we find that counties more exposed to the reduction in tariff uncertainty post-accession are characterized by increasing exports...
Do Richer Households Exit Agriculture? Positive Income Shocks in Rural China
Jessica Leight, Jul 18, 2018Rural households in China have experienced a steadily increasing rise in their real income over the last twenty years as economic reforms have revitalized this sector. Analyzing an unusual natural experiment generated by an increase in prices paid for mandatory grain procurement in China post-1993, I seek to provide evidence around how an increase in permanent income affects households’ production portfolio. Evidence suggests that households experiencing positive income shocks substitute away from agricultural production and are more likely to migrate and to invest in non-agricultural production. They also increase their observed levels of borrowing and non-staple consumption.
