Economic Performance In China Research Articles

Sustainable economic performance and natural resource price volatility in the post-covid-pandemic: Evidence using GARCH models in Chinese context

Recent research demands the influence of COVID-19 on every field of life. Plenty of research work investigated the influence of the volatility of natural resources on economic advancements during COVID-19, though, the impact of the pandemic still persists in the post-pandemic era. Therefore, the current research aims to explore the connectedness of the volatility of oil prices and sustainable economic development during the era after the pandemic. The slump in prices of oil during the pandemic is subject to major concerns in the era after the pandemic. Although this connection is explored by recent researchers, current research work underwrites the prevailing literature by inspecting the connection between oil price volatility and sustainable economic performance during and post COVID-pandemic in China over the period comprising January 2020 to April 2023. The study employs the ordinary least squares regression (OLS), generalized Autoregressive conditional heteroskedasticity (GARCH) (1,1), and Threshold GARCH econometric models to explore the connection between the said constructs. The outcomes infer that the volatility of oil prices is negatively associated with the sustainable economic performance in China during Post COVID-pandemic. The research infers that the vulnerability of the oil prices is more during and after the pandemic eras in China. On the basis of the results, this research work recommends introducing technological innovations, and protective trials to avoid the impact of pandemics on the connection between natural resource volatility and sustainable economic performance.

Assessing the performance and economic viability of solar home systems: A way forward towards clean energy exploration and consumption

Energy is an essential source of global economic expansion since it is related to fundamental generation and usage. In this context, solar home systems (SHS) are advantageous in two dimensions: reducing energy expenses and satisfying energy requirements. This research intends to assess the effectiveness of implementing SHS in the economic performance of China's small and medium-sized enterprises. Moreover, we investigate the moderating impact of knowledge of SHS between the elements of a deployment of SHS and the economic performance of small and medium-sized enterprises. The data was collected from 520 respondents, and the structural equation modeling (SEM) method was employed for data analysis. The findings showed that cost-efficient energy from SHSs has a continuous and considerable relationship with the economic performance of small and medium enterprises. Likewise, knowledge of SHS moderates significantly the links between efficient energy supply via SHS, the durability of SHS, and the economic performance of small and medium-sized enterprises. Further improvement of the economic performance of small and medium-sized enterprises is required by a greater emphasis on SHS, as shown by these results, which serve as good guidance for those who design regulations.

Financial market risk, technology and natural resources nexus: Evidence from China

Natural resources are considered a vital organ of the economy and play an important role in economic growth, creating jobs and enhancing the standard of life across the globe. However, Natural resources remained a dilemma for researchers in the past; several studies suggest it as a curse while some authors suggest it as a blessing for the country's economic growth This research examines the “resource curse” hypothesis along with the interactive relationship of technological innovations, financial risk index and economic growth of china for the period of 1984–2021. Few researchers in previous studies have analyzed the financial risk index and technological innovations in the nexus with natural resources. This novel study aims to examine the impact of natural resources on the economic growth of china in the presence of technological innovations and financial risk index. Time series methods and Quantile regression is employed to examine the impact of indicators on economic performance. For the stationarity, ADF (Augmented Dicky-Fuller tests) are used, for better co-integrations Bayer-Hanck model is employed, to check the robustness of the study we use FMOLS model (fully modified ordinary least square) and DOLS model (Dynamic ordinary least square) and in the last the granger causality test is used. The results of the study are concluded on the point that natural resources negatively affect the economic growth of china which means there is resource curse hypothesis in china. Furthermore, the technological innovations, enhancement in the financial risk index and trade lead to the improvement in China's economic growth. We also find that investment and improving technological innovations can bring significant changes in the country's economic performance. Last we find an inverse relationship between financial risk and the economic performance of China.

Revisiting the importance of forest rents, oil rents, green growth in economic performance of China: Employing time series methods

The issue of environmental quality with natural resource extraction and excessive carbon emissions is often linked to economic growth. Still, the existing literature is ambiguous due to contradictory evidence concerning the nexus of natural resources, green growth, and economic performance. This study tends to provide a clear picture of the said nexus in the case of China from 1990 to 2020. Using advanced time series approaches, this study finds that all the variables are I(1) stationary, and the cointegration association is valid in the long run. Considering the variable's asymmetrical distribution, this study employed the novel method of moment quantile regression (MMQR). The empirical estimate of the study reveals that natural resources (such as forest rents and oil rents) and green growth adversely affect economic performance, which validates the natural resource curse in the country. The influence of green growth and forest rents is significant, but the oil rents are insignificant. However, carbon emissions positively impact the country's economic performance in the long run. The results are robust and more significant after the robustness test of bootstrap quantile regression. Based on the results obtained, this study suggests increasing investment in environmentally friendly resources to reduce natural resource dependence and negative externalities.

Moving beyond economic criteria: Exploring the social impact of green innovation from the stakeholder management perspective

AbstractUnlike previous studies mainly focused on the economic impact of green innovation, this paper explores its social returns, denoted by the stakeholder engagement, given stakeholders can affect or are affected by the firm's low‐carbon transition. Drawing on the complementary view and the substitute view, our empirical results from China over the sample period of 2012 to 2018 found that more green innovation would crowd in stakeholder‐related activities, especially for the welfare improvement of customers and suppliers. However, better stakeholder relations do not bring positive economic returns given the weak social pressures and uncertain rewards for being socially responsible in emerging countries. By doing so, our study expands the theoretical knowledge about the social impact of green innovation, thus offering a practical guidance for firms to simultaneously manage their environmental performance, social performance and economic performance in China and, potentially, in other emerging countries which also pursue environmental transition and better stakeholder management.

Natural resources volatility, political risk and economic performance: Evidence from quantile-on-quantile regression

The growing concerns regarding natural resources volatility (TNR) and CO2 emissions in relation to economic performance attract the attention of scholars and policy-makers. In this regard, the current study investigated both TNR and CO2 along with the political risk index (PRI) in the case of China. The study used a novel approach, Quantile-on-Quantile regression methods, to capture the influence of each variable at different quantiles covering the period from 1988 to 2020. The examined results revealed that TNR, PRI, and CO2 emissions are positively but weakly associated with economic performance in China. The nexus is found weaker regarding the magnitude at lower quantiles while stronger at upper quantiles. Moreover, the frequency domain causality suggests that TNR significantly causes economic performance in the medium and the long run. At the same time, PRI is found to significantly cause economic performance in the long run only. In contrast, CO2 emissions are found to significantly cause economic performance in the short-run, medium-run, and long-run. Based on the empirical findings, the current study recommends policies to minimize volatility in natural resources, strengthen political and financial sectors, improve institutional quality, and efficient use of fossil fuels to promote economic performance while reducing environmental hazards.

Does Public Health Influence Economic Performance? Investigating the Role of Governance and Greener Energies for the Case of China.

In the last few decades, the world has faced some natural issues, due to which economic growth faces a severe threat. Natural disasters like pandemic outbreaks and man-made disasters like pollution emissions are very frequent in the current times, which also influenced the economic growth, where the institutes could play a primary role in economic growth stimulation. This study aims to analyze the association of public health expenditures, institutional quality, renewable energy, and economic performance in China. This study uses quarterly data covering the period from 1996Q1 to 2020Q4 and employs various time-series estimating approaches. The Augmented Dickey-Fuller estimates asserted that all the variables are stationary at first difference. Also, the Bayer-Hanck combined cointegration validates that all the variables are cointegrated. Employing the three long-run estimators, i.e., Fully Modified Ordinary Least Square, Dynamic Ordinary Least Square, and canonical cointegrating regression, the results asserted public health expenditures and institutional quality (including government efficiency and political stability) significantly enhances economic performance in China. Whereas two indicators of corruption control and regulatory quality do not play any significant role in promoting the economic performance of China. On the contrary, renewable energy is found negatively associated with economic performance. Also, the Pair-wise Granger causality validates mixed causal associations between the study variables. As a developing and fossil energy-dependent economy, this study provides relevant policy implications for maintaining economic growth and rebalancing economic performance in China.

Development zones and urban economic performance in China: Direct impact and channel effects

AbstractDevelopment zones constitute a special type of place‐based policy that has been implemented worldwide. As an essential economic development engine, Chinese National Economic and Technological Development Zones (NETDZs) are perceived as a successful example. However, few studies have looked into the channel effects at work in development zones concerning industrialization and urbanization, despite the crucial nature of such effects with regard to sustainable development of development zones. Following a brief description of NETDZs and their theoretical mechanisms with urban economic performance, industrialization, and urbanization, this study used a simultaneous equation model to generate empirical evidence of the impact of the establishment of NETDZs on urban economic performance and its channel effects through industrialization and urbanization. The results confirm that NETDZs exerts a positive and significant impact on urban economic performance, and NETDZs also show indirect influence in urban growth through urbanization. Although significant and positive intermediation of industrialization remains invalid, foreign direct investment and investment in fixed assets are still crucial in Chinese industrialization. Both industrialization and urbanization play an important role in Chinese urban economic development. Meanwhile, compared with eastern regions more influenced by urbanization, industrialization still acts as a major impetus in inland China.

High-speed railways and local economic performance: evidence from China’s prefecture-level cities

PurposeThe purpose of this paper is to identify the causal effect of high-speed railways (HSRs) and investigate the affecting channels; the second purpose is to examine how HSRs change the distribution of economic activity across cities and sectors.Design/methodology/approachA difference-in-difference strategy is implemented to estimate the impact of recently built HSRs on local economic performance in China, exploiting the geography and time variations in HSR operations.FindingsUsing panel data from China’s City Statistical Yearbook 2001–2019, the authors find that HSRs lead to a significant increase in cities’ gross domestic product (GDP) and GDP per capita, but the authors do not find any significant change in GDP growth. This conclusion still holds true after the authors address the endogeneity problems. A mechanism analysis shows that HSRs improve local economic performance mainly by increasing fixed asset investment. The authors also find that the HSR investment is a policy that favors metropolitan areas due to the larger increase in the GDP for larger cities and with HSRs, the industrial and service sectors will further agglomerate in larger cities.Originality/valueThe authors contribute to the literature in several ways. First, this paper improves the estimation strategy in identifying the HSR impact on the local economic performance. Second, this paper investigates the affecting channels of HSRs. This paper proves that HSRs in China promote the cities’ economic performance mainly by increasing the fixed asset investment. Third, this study provides evidence for the new economic geography models pioneered by Krugman (1991).

Macroeconomic impacts and transmission channels of an epidemic shock: evidence from the economic performance of China during the 2003 SARS epidemic

ABSTRACT This paper uses the 2003 severe acute respiratory syndrome (SARS) epidemic as a quasi-experiment to study the economic impact of epidemic shocks. It aims to answer the following two questions. 1) How does an epidemic affect various macroeconomic variable? 2) What are the transmission channels through which the epidemic shock affected firms? We build an epidemic shock macroeconomic model and use synthetic control method (SCM) and difference-in-differences (DID) estimator to estimate the impact of the 2003 SARS epidemic on the economic performance of China. We find that the SARS epidemic negatively affected China’s GDP growth rates and its levels of consumption, investment, and productivity. The lag time effect of SARS was very short because of the short duration of the outbreak and adequate market liquidity. We isolate and compare the effects of the SARS epidemic from the perspectives of changes in business cycles, labour supply shocks and external financing conditions on firms’ economic performance using firm-specific sensitivity estimates prior to the SARS epidemic. We find that the SARS epidemic had a larger negative impact on firms with higher sensitivity to business cycles and labour supply shocks.

Energy policy and financial performance in China: mediation effect of financial inclusion.

The issues of cleaner production and socioeconomic advancements have taken a central stage due to the dynamism of the correlation between energy use and ecology. Given this background, the research delves into how to construct a framework to unravel diverse understandings of energy policy vis-a-vis green economy by examining the mediating role of financial inclusion. The analysis applied a non-radial DEA and longitudinal dataset model for the scenarios of thirty regions in China, relying on their longitudinal dataset from 2010-2017. The findings indicate that the Chinese regions' total green economic performance indicator (EPI) has advanced by 9.88% between 2010 and 2017. In addition, the econometric analyses prove that regional renewable energy policies and pollution abatement programs explicitly influence the improvement of the environmental performance index. Again, the results show that the probability figures of the individual specific limit equation and the dual limit values crossed the 1% significance analysis level simultaneously, indicating a dual limit impact. 0.74 to 1 is the range that marks the green EPI for Jiangsu, Shandong, Guangdong, Hainan, Zhejiang, Shanghai and Fujian. Ultimately, the analysis serves as a policy inference tool for policy formulators and regulators on encouraging green economic performance in China.

Analysis of the Financing Structure of China’s Listed New Energy Companies under the Goal of Peak CO2 Emissions and Carbon Neutrality

Under China’s “Dual Carbon” strategic goal, electric energy substitution on the energy consumption side and clean substitution on the energy supply side have become an important path to achieve peak CO2 emissions and carbon neutrality. Adjusting the energy structure and encouraging new energy to replace traditional energy is an important manifestation of China’s energy supply revolution. Therefore, China’s new energy companies have grown rapidly over the past decade. The development and growth of this industry is inseparable from government policy support. The profitability and economy are essential for the new energy industry to support its sustainable development., especially the choice of business models such as operation model and financing structures. Therefore, we build extended panel vector autoregression (PVAR) models with two-step system GMM(SYS-GMM) estimator which introduced predetermined and strictly exogenous variables to explore the dynamic correlation between financing structure and economic performance of China’s new energy public companies. The number of patent approvals and financial leverage are introduced as exogenous control variables. The results show that although the increase in costs caused by financing behavior will have a negative impact on the company’s return on equity in the short term, with the rational investment and utilization of funds, the negative impact will gradually weaken. Listed new energy companies can effectively use financing funds, and the use of different financing tools has different effects on company performance. Although debt financing can help promote the company’s profitability, it is detrimental to its future growth capacity.

Environmental and economic performance of China’s ETS pilots: New evidence from an expanded synthetic control method

An emissions trading scheme (ETS) is widely regarded as a cost-effective instrument for curbing global climate change. In 2011, China, the world’s leading carbon emitter, introduced ETS pilots in seven cities/provinces. Subsequent studies have debated their effectiveness, especially in terms of their economic performance. This article investigates whether China’s ETS pilots have successfully balanced carbon emission reductions and economic growth. For this, we apply an extended synthetic control method for multiple treated units that relaxes the parallel trends assumption required by the difference-in-differences estimation commonly used in the field The results show that overall CO2 emissions decreased by approximately 1,165.72 Mt from 2011 to 2015, representing 12.78% of the pilot regions’ total industrial CO2 emissions. As for the ETS pilots’ economic performance over this period, we find that there was a loss in the value of industrial output totalling approximately RMB5,608.88 billion. That said, the economic loss was short term in nature and decreased over time. Regions showed heterogeneous responses to the ETS pilots. Although all of them experienced a decline in CO2 emissions, Beijing and Shanghai showed the fastest reduction, while Guangdong showed the largest reduction. Losses in industrial output were concentrated in Guangdong (RMB7,416.66 billion; 4.64% of the region’s total industrial output) and Shanghai (RMB701.28 billion; 4.08%); the other regions saw economic losses only in the first two years after ETS implementation. These findings suggest that policy makers should consider a gradual (rather than a radical) ETS policy and make firm subsidies part of their battery of instruments in the early stage of establishing a nationwide ETS.

Evaluating the effects of geometry and arrangement parameter of flat panel photobioreactor on microalgae biomass production and economic performance in China

In the present study, a model integrated algal biomass productivity prediction and economic analysis for flat panel photobioreactor (PBR) was proposed. The effects of PBR geometry dimension and spacing distance on culture temperature, biomass productivity and production cost were assessed. The simulation results showed that geometry dimension and arrangement parameter of flat panel PBR have a significant impact on algal biomass productivity and production cost. The biomass cost ranged from 2.82 $ kg−1 to 25.07 $ kg−1 was estimated in the different design scenarios, corresponding to biomass productivity of 10.13–36.70 t ha−1 yr−1. The minimum biomass cost of 1.68 $ kg−1 was further predicted by integration of increasing biomass productivity, free carbon dioxide adoption, and thermo-tolerant strain used without cooling action. Additionally, it was also found that the biomass production cost estimated in the present work was lower than those previously reported, which is partially attributed to the lower electricity and labor cost in China. In all, the model framework proposed here can help to optimize the layout design of PBR system in various geospatial locations to achieve cost-effective production of microalgae.

The threshold effect of R&D investment on regional economic performance in China considering environmental regulation

ABSTRACT Given the regionally differentiated environmental regulatory means, this paper evaluates the contribution of firms’ R&D investment to economic growth with interprovincial panel data on 30 provinces in China from 2009 to 2016, which is based on the time-varying threshold model. Additionally, the coupling coordination degree model (CCDM) is used to measure the effects of technological innovation through enterprise collaboration for R&D input and investment-focused environment regulations. We then explore the inter-regional technology transfer path with different cooperation effects in areas and find: (i) The economic performance of the R&D investments of regional enterprises shows a downward trend with the strengthening of cost-focused ER while an inverted ‘U’-shaped relationship that first strengthens and then weakens is presented with the strengthening of investment-focused ER. (ii) The degree of coupling calculated by CCDM is generally low, and synergies are improving from the west to the east, from a geographic perspective.

Familiarity breeds growth: The impact of factional ties on local cadres’ economic performance in China

AbstractSome attribute China's rapid economic growth to a cadre promotion system that rewards economic performance. Others argue that political promotion in China hinges on factionalism. Extant empirical studies often assume that performance can be measured independently from the effect of factionalism. We test the validity of this assumption by examining whether local cadres’ economic performance would change as a result of losing vertical ties to a higher authority. We find an immediate increase in the growth rates of local GDP and government revenue. However, the performance change is mediated by the type of succeeding leaders, as it occurs only under locally promoted leaders who have existing ties with the local cadres. We further examine various channels through which a leader's insider status may affect local economic performance and find that newly appointed outsider leaders would cut fiscal transfers to the local level, which may explain the drop in their short‐term performance.

China's ocean economic efficiency depends on environmental integrity: A global slacks-based measure

Absolute This paper measures the regional oceanic economic performance in China's 11 coastal areas from 2007 to 2014 using a dynamic growth efficiency framework. We construct a new global Malmquist ocean performance index (GMOPI), which integrates the global benchmark technology with the slacks-based measure (SBM) and Malmquist-Luenberger (ML) productivity index. This index can successfully eliminate a common infeasibility problem encountered in ML cross-period problem. Furthermore, the labour input, capital input, economic output, and environmental output contribution indexes are proposed by internally decomposing the GMOPI, which can explain which factor could bias technological progress. The empirical results indicate two different modes of China's oceanic economic growth during the examined time period, i.e., a volatility phase (2007–2010) and a stability phase (2011–2014). Moreover, the factor contribution indexes show that the low contribution scores for environmental integrity and capital in the volatility phase. The findings highlight the need for the further strengthening of environmental and investment policies in China.

How much does regional integration contribute to growth? An analysis of the impact of domestic market integration on regional economic performance in China (1997–2011)

This study analyses domestic market integration’s (DMI’s) dynamic influence on regional economic growth in China. The authors construct a matrix of annual DMI indices for 29 provinces for 1997–2015. They calculate the reciprocal matrix and combine it with the β-convergence model and spatial econometrics to analyse the relationships between DMI and regional economic growth. Their findings indicate that the relation between these two variables is not straightforward, and 2004 was a tipping-point year. Before 2004, the statistical relationship between DMI and regional economic growth was downward sloping, which suggests a trend of divergence and negative spillover effects across the 29 provinces. After 2004, the relationship between DMI and regional economic growth becomes positive: increased DMI now is strengthening (regional) economic growth. The authors provide the possible explanations for the unstable relationship combined with China’s reality as well.

Ethnic Diversity and Economic Performance in China: The Role of Education, FDI, and Trade

ABSTRACT This article analyzes the effect of ethnic diversity on China’s economic performance. We claim that the conventional ethnic diversity indices may not be adequate for appropriately estimating the effect of ethnic diversity on economic performance in China, so we develop revised ethnic diversity indices. Consistent with the existing literature, we find that ethnic diversity alone worsens economic performance. However, dummies for ethnic diversity education and foreign direct investment (FDI) have a positive effect on economic performance. The marginal impact of education raises economic performance because it improves communication ability across diverse ethnic groups. At the same time, the expansion of FDI can create a proper context for ethnic groups to work together in order to improve economic performance. However, the ethnic diversity trade dummy does not significantly affect economic performance.

Local Government Debt, Factor Misallocation and Regional Economic Performance in China

AbstractThis paper examines total factor efficiency and productivity performance by taking into account local government debt (LGD) in 31 Chinese provincial regions for the period 2000–2013. The results show that neglecting LGD may overstate economic performance in Chinese provinces. The eastern region shows better performance in single factor efficiency and total factor efficiency than the non‐eastern regions. The western region shows the worst total factor performance. The north‐eastern region is the only region that has experienced a decline in total factor performance. The state‐dominated, investment‐driven development model may help technological progress across Chinese regions but could lead to significant factor misallocation. We argue that biases towards more state‐dominated investment and land supply in less productive western, central and north‐eastern regions, at the expense of investment and land supply in more productive eastern regions, have contributed to the recent slowdown in economic growth in China. Therefore, further market‐oriented reforms in factor markets should be considered in the future.