CONTENTS
Learning by Doing, Low Cost Competition and Conversion of Economic Gro
wth Pattern
·················The Research Group of Economic Institute of CASS (4)
FDI, Accumulation of Human Capital and Economic Growth
····························· Dai Qian and Bie Zhaoxia (15)
Intellectual Property Right Protection and FDI Strategies of MNE
······························Yang Quanfa and Han Ying (28)
Dynamic Analysis between Public Debt and Macro Economy
——A Framework on Fiscal Stability
·······················Ma Shuanyou,Yu Hongxia and Chen Qiqing (35)
Effects of RMB Appreciation on the Chinese Macroeconomy
···································· Wei Weixian (47)
Shocks to Parent Employment and the Impacts on College Enrollment Decision
in Urban China
·······························Du Yang and John Giles (58)
From Malthus to Solow: An Explanation for the Motivation and Obstacles
Effecting Farmer Labor Emigration in China
·····················Cheng Mingwang， Shi Qinghua and Xu Jianxa (68)
Industry Agglomeration in China: Economic Geography, New Economic Geography
and Policy
··························· Jin Yu, Chen Zhao and Lu Ming (79)
Human Capital Accumulation and Regional Total Factor Productivity
····························Yue Shujing and Liu Chaoming (90)
Village Election and Income Distribution:
Evidence from 48 Villages in 8 Provinces
······························· Yan Shen and Yang Yao (97)
Public Finance, Financial Support to Rural Area and Rural Financial Reform:
Analysis of Survey in Guizhou Province and Sample Counties
······························· Xie Ping and Xu Zhong (106)
Overconfidence,Limited Participation and Asset Price Bubbles
·····················Wu Weixing, Wang Yongxiang and Liang Hengyi (115)
Learning by Doing, Low Cost Competition and Conversion of Economic Growth Pattern
The Research Group of Economic Institute of CASS
Abstract:
The common sense has been reached about the conversion of China's economic growth mode. However, the most study was limited to the macroeconomic analysis, which didn't discuss the theory and mechanism of microeconomic behavior. By studying the theory of “learning by doing”, this paper presents a supply curve to explain catchup type of economic growth. With respect of profit arbitrage, this paper also discusses the low cost competition in a mass caused by “learning by doing”. Through the theory and specific facts, we try to understand the technical progress mechanism and the combination of technology factors. At last this paper points out that the conversion of economic growth mode can be boosted through supply policy and deepening the market reform.
Key Words:
Learning by Doing; Technical ImitationArbitrage Mechanism; Growth Pattern
JEL Classification:D830,O110,O120
FDI, Accumulation of Human Capital and Economic Growth
Dai Qiana and Bie Zhaoxiab
(a: Economics and Management School and Center for Economic Development Research
, Wuhan University;b: School of Economics, Wuhan University of Technology)
Abstract:
The paper explores two relative issues, the determinants of industrial transfer from the North to the South in FDI and how FDI affects economic growth in the South, in a two-country endogenous growth model. The competition from the host country forces Multinationals to transfer more advanced technology or newer industries to the host country and whether FDI contributes to economic growth depends on the speed of human capital accumulation in the host country. The paper suggests that popularizing and improving education to increase human capital accumulation should be a feasible development strategy available to the South governments.
Key Words:
FDI； Human Capital； Endogenous Growth
JEL Classification:F210，O150，O410
Intellectual Property Right Protection and FDI Strategies of MNE
Yang Quanfa and Han Ying
（Lingnan School, Sun YatSen University）
Abstract:
This paper builds a mold of twostage and threeplayer dynamic game to analyze the influence of host country's policy of the intellectual property right protection on FDI. The result shows that providing efficient and proper IPRP policy is the best choice for the host country for that can not only stimulate the FDI inflow, but also bring much advanced technology, which will reduce the cost and increase the output, hence maximize the welfare of the host country. Under efficient protection it is wise for the host government to allow the MNE choose the shareholding according to the profit maximization principle. If and only if the host government could not offer efficient protection, it is the secondbest choice for the government to limit the MNE's shareholding.
Key Words:
Intellectual Property Right Protection; FDI; Technology Transfer
JEL Classification:O340, F230
Dynamic Analysis between Public Debt and Macro Economy
——A Framework on Fiscal Stability
Ma Shuanyou,Yu Hongxia and Chen Qiqing
(Institute of World Economy and Politics,CASS;Beijing Techenology Transaction Advancing Center;Renmin University in China)
Abstract:
After the existing literature is reviewed,a theoretical framework is developed for the fiscal dynamic stability.Then monthly VAR models are estimated empirically,which shows that there's little effects of public debt on interest and inflation,implying that China fical policy from 1979 on is sustainable the whole.Finally the policy implication is concluded.
Key Words:
Fiscal Deficit；Public Debt；Fiscal Stability；Interest Rate；Inflation
JEL Classification:E310,E630,E690
Effects of RMB Appreciation on the Chinese Macroeconomy
Wei Weixian
（Department of Finance,Xiamen University）
Abstract:
A Computable General Equilibrium (CGE) is constructed to evaluate quantitatively the impact of the revaluation of Chinese Renminbi (RMB) on China's economy.The result indicated that the effect of appreciating RMB on the real growth rate of the GDP is not linear,but increase like quasiexponent form.The simulation result of the impact on the Chinese export and import is consistent with the simple intuitionistic judgement; it has an adverse effect on the employment and the decrease increment in employment is up with the appreciating currency extent; its impact on the consumption of urban and rural households is quite different,and it will increase the consumption gap of the two kinds of households; its effects on industrial sectors are quite different as well.The general conclusion in this study is that large appreciation of RMB currency is quite disadvantage on China's macroeconomy,the small revaluation is acceptable in the meaning of its effect on socioeconomy,as a result,it will be wise to widen the change interval of RMB exchange rate in order to alleviate the pressure of RMB appreciation.
Key Words:
RMB Exchange Rate; Computable General Equilibrium Model; China's Economy
JEL Classification:C680,E600,F300,F400
Shocks to Parent Employment and the Impacts on College
Enrollment Decision in Urban China
Du Yang
(Institute of Population and Labor Economics，CASS)
John Giles
(Department of Economics,Michigan State University)
Abstract:
In this paper we employ urban household data collected by Institute of Population and Labor Economics to present the evidence of shocks to parent employment on the college enrollment decision of kids.We provide background on China's economic restructuring and shocks to parent employment,discuss the higher education system in China,and review recent reforms affecting both the capacity and financing of post-secondary institutions.By carefully controlling for the u
nobserved heterogeneity,we use a linear probability model to find out that a father's loss of employment during the year prior to college attendance does indeed have a negative impact on probability of college enrollment and the magnitude of effect is about 30%.
Key Words:
Employment Shock; Restructuring; College Enrollment Decision
JEL Classification:I200,J180,P360
From Malthus to Solow: An Explanation for the Motivation and Obstacles Effecting Farmer Labor Emigration in China
Cheng Mingwang Shi Qinghua Yang Jianxia
(Aetna School of Management of Shanghai Jiaotong University)
Abstract:
Farmer labor emigration is an important question we have to deal with in our industrialization. It is also a basic way to solve three questions concern agriculture, rural area and farmer in China. Based on the pushpull theories, this paper tries to build Malthus and Solow model by using recursive approach in Dynastic Macroeconomics. This model shows that push comes from the town, especially the industry technological development in the urban area is the key reason caused farmer labors emigrate from rural area to urban area. This conclusion has also been improved by the logit econometric model based on the Macroeconomic variables and descriptive analysis based on Microeconomic variables. The study also shows that strengthen universal education will definitely have a deep influence on this emigration. Besides, sex, family income and region gap will affect farmer labor's emigration.
Key Words:
Dynastic Equilibrium; Pullpush Theory; Labor Emigration; Motivation
JEL Classification:J430,R230,O810
Industry Agglomeration in China:
Economic Geography, New Economic Geography and Policy
Jin Yu, Chen Zhao and Lu Ming
（China Center for Economic Studies, Fudan University, 200433）
Abstract:
Based on a new economic geography (NEG) framework, this paper explores the causes of industry agglomeration in China using the provincial panel data during 1987—2001. The main findings are: (1) Economic opening that is related to geography and history leads to industry agglomeration. (2) Market scale, urbanization, infrastructure construction and the weakening of governmental role promote industry agglomeration. (3) Coastal areas have geographical advantages of industrial development. Our study contributes evidence from China to the New Economic Geography theory and finds that, besides economic geography, economic policy also relates to industry agglomeration.
Key Words:
Agglomeration； Economic Geography； New Economic Geography； Policy
JEL Classification:L600， O180
Human Capital Accumulation and Regional Total Factor Productivity
Yue Shujing and Liu Chaoming
WU Li, Zhou Jianbo and GAO Qian
(School of Economics and Management, Southwest Jiaotong University)
Abstract:
This paper, applying Malmquist index, analyzes the Total Factor Productivity evolution in 30 provinces in China from 1996 to 2003 by breaking down productivity gains into technical change and efficiency change. To avoid biases, Malmquist index of productivity, including human capital, is estimated. Such results are drawn: The accumulation of human capital in China is quite rapid; the efficiency deviation appears to have an obvious increasing trend; productivity growth was found for the data period, and it was accomplished mainly through the technical progress rather than efficiency improvement. The comparison between including human capital and excluding human capital indicates that the efficiency index has been underestimated and the technology progress index has been overrated.
Key Words:
Human Capital; Regional Economic Growth; Total Factor Productivity; Malmquist Index
JEL Classification:O470, O400
Village Election and Income Distribution:
Evidence from 48 Villages in 8 Provinces
Yan Shen and Yang Yao
WU Li, Zhou Jianbo and GAO Qian
(China Center for Economic Research, Peking University)
Abstract:
Using village and household survey data collected from 48 villages of eight Chinese provinces for the period 1986—2002, this paper studies how the introduction of village election affects income distribution at the village level. The Gini coefficient is used to measure income distribution. We estimate both a static and a dynamic model and find that in the long run, the introduction of election reduces the Gini coefficient by 64%—8%. We also study the effects of election over time and find that they are the most significant for the 3rd6th year after the first election. These results provide the first set of evidence for the role of grassroots democracy in reducing income inequality and possess strong policy implications for China to strengthen village election.
Key Words:
Grassroots Democracy；Income Distribution；Dynamic Panel Models
JEL Classification:D310，D390
Public Finance, Financial Support to Rural Area and
Rural Finance Reform: Analysis of Survey in Guizhou
Province and Sample Counties
Xie Ping and Xu Zhong
(Central SAFE Investment Ltd. and Peoples Bank of China)
Abstract：
This study analyzed the relationship between public finance and rural finance in rural areas of Guizhou Province and six sample counties. Data show that insufficient public finance investment distorted financial system, and also caused rural fund outflow, shortage of credit supply and low efficiency of rural financial institutions. To rectify distorted rural financial system, public finance should play proper role in the rural area, and systematic efforts are also needed.
Key Words：
Public Finance; Financial Support to Rural Area; Rural Finance
JEL Classification：H230,J210,Q140
Overconfidence，Limited Participation and Asset Price Bubbles
Wu Weixinga Wang Yongxiangb Liang Hengyic
(a: School of Banking and Finance, University of International Business and Economics;b: School of Business,Columbia University;c: Institute of Applied Mathematics, Chinese Academy of Sciences)
Abstract：
Limited participation can arise endogenously in the presence of model uncertainty, and overconfident investors enter the market differently from the rational investors. Our model generates novel predications on how overconfidence relates to limited participation, excess entry and asset pricing. This model has strong empirical implication about the relations among the liquidity premium, the shareholder structure and the risk premium. The paper shows that investors who are overconfident about asset mean payoffs have larger nonparticipation regions than investors with rational. But investors who are overconfident about asset mean payoffs are more aggressive in their participation regions than investors with rational. Further, this model derives the corresponding relations between the shareholder structures and the equilibrium asset prices in different cases.
Key Words：
Overconfidence; Limited Participation; Asset Price Bubbles
JEL Classification：D810，G100，G120
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