Abstract In this research we investigate the association between local state capacity (LSC) and effective tax burdens (ETBs) on industrial firms within counties between 1998 and 2013. The LSC measures a state's capacity for policy implementation and specifically its ability to acquire low‐cost agricultural land for nonagricultural (industrial or commercial) purposes. Based on China's government‐led development experience since the 1990s, we draw on two unique household survey datasets to capture LSC at county level. We find robust evidence that greater LSC was associated with much lower ETBs on large industrial firms. This taxation pattern implies local government's primary reliance on larger manufacturing firms, while the ETBs for small‐and‐medium enterprises are not as prominently addressed. This research highlights that LSC can affect both the amount of revenue a local government can generate and the methods it uses to collect these revenues.

Abstract This paper provides transaction‐level evidence about the impact of capital account liberalization on firms' bond issuance in the international financial market. Using bond issuance data for firms headquartered in China between 2014 and 2018, we showed that domestic private firms issued more bonds abroad than foreign‐invested enterprises after restrictions were largely relaxed, controlling for possible confounding shocks such as monetary policy, local credit market shocks, US interest rate, carry trade, and global uncertainty shocks measured by the Chicago Board Option Exchange's Volatility Index. We found that domestic firms did not increase the overall volume of bond issuance but just had a higher portion of international bond issuance. We also found that domestic firms with higher tangible asset ratios tended to issue more bonds abroad. Our results suggest that targeted liberalization policy could effectively stimulate firms to issue bonds abroad. Policymakers need to monitor closely firms that issue more bonds abroad and thus have greater exposure to global shocks, incorporate these financial risks into policy design, and safeguard financial stability more effectively.

Abstract The economic impact of the geographical rotation of local officials is important in China's official management system. This study used a zero‐inflated Poisson regression model and found that the geographical rotation of local officials significantly increased cross‐city mergers and acquisitions (M&As) of enterprises. The impact of local officials' geographical rotation on M&As was more pronounced under certain conditions. These conditions included: (i) when officials were transferred from cities with a higher development level to cities with a lower development level; (ii) when the outflow cities were municipalities directly governed by the central government, provincial capitals, or separately listed cities; (iii) when the transfers of officials occurred within the same province; (iv) when the transfers took place before 2012; and (v) when the transfers happened in the years following significant central government conferences, which provided strong political incentives for M&As.

Abstract We build a simple overlapping generation model to investigate the effect of life expectancy on the real exchange rate where fertility is chosen endogenously. The model reveals that, although the overall effect of life expectancy on the real exchange rate is not certain, longer life expectancy tends to cause the real exchange rate to depreciate by reducing fertility. Fertility thus serves as a mediator in the effect of life expectancy on the real exchange rate. Evidence from 148 economies (1980–2018) shows a statistically significant and robust negative relationship between life expectancy and the real exchange rate. It is estimated that a 1 year increase in life expectancy is associated with a 1.5 percent depreciation in the real exchange rate. The evidence also confirms the mediated effect of fertility. The mediated effect that fertility exerts accounts for 30 percent to 50 percent of the total effect, depending on the real exchange rate index used.

China & World EconomyVolume 31, Issue 1 p. 211-214 Table of Contents, 2022 Table of Contents Vol. 30, No. 1–6, 2022 First published: 19 January 2023 https://doi.org/10.1111/cwe.12464AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume31, Issue1Special Issue: Challenges and Structural Adjustments in China in the Aftermath of the PandemicJanuary‐February 2023Pages 211-214 RelatedInformation

Abstract Based on the product‐country level trade data from 2004 to 2017, as well as the High‐Tech Products Catalog from the US Census Bureau, this paper examines empirically the current phenomenon of “national concentration” in high‐tech exports. The results show that the phenomenon of “national concentration” not only exists but also tends to be self‐reinforcing. Compared with other products, the exports of high‐tech products tend to be concentrated in certain countries, and this concentration trends were further strengthened after the global financial crisis of 2008–2009. The national concentration of R&D activities may be one of the important causes of the national concentration of high‐tech products. This pattern remains robust when we further use the value‐added export data and different definitions of high‐tech products. We argue that the phenomenon of “national concentration” of high‐tech exports may herald the arrival of the “Second Great Divergence” – the divergence between innovative and manufacturing activities – in the global economy.

This study investigates whether the tax‐sharing system has deteriorated the fiscal capacity of subnational governments by analyzing how fiscal revenues are divided between provincial and sub‐provincial governments. Our study of county‐level fiscal data from Zhejiang Province in China during 1994–2007 shows that intra‐provincial revenue‐sharing rules favor county governments in two ways: (i) they improve county governments ‘fiscal autonomy in terms of using their own revenues; and (ii) they enhance county governments ‘fiscal capacity through province‐to‐county general transfers. In addition, we find that intra‐provincial fiscal revenue‐sharing rules and transfers reduce fiscal disparity between counties.