China Economic Quarterly International (CEQI)

Volume 3, Number 2

June 2023

 

Financial technology, macroeconomic uncertainty, and commercial banks’ proactive risk-taking in China

Fang Liang, Pu Zhao, Zhuo Huang

 

Risk perception, online search and consumption distortion

Wei Huang

 

How minimum wage shortens employment terms?

Guangyuan Guo, Dongmin Hu, Huanhuan Wang, Ji Zhang

 

Opportunity of higher education and the choice of high schools

Chunbing Xing, Yan Sun, Chuliang Luo

 

The returns to computer use in the Chinese labor market

Yang Du, Peng Jia, Albert Park

 

Covid-19 outbreak, ambiguity aversion, and macroeconomic expectations

King King Li, Bo Huang

 

China Economic Quarterly International (CEQI) 为开放存取(open access)刊物，请访问 https://www.sciencedirect.com/journal/china-economic-quarterly-international/vol/3/issue/2，免费下载论文。

 

Financial technology, macroeconomic uncertainty, and commercial banks’ proactive risk-taking in China

Fang Liang, Pu Zhao, Zhuo Huang

Abstract

In this paper, we collect the annual data of 145 commercial banks in China from 2010 to 2019 and use a panel data fixed-effect model to study how fintech (financial technology) affects the influence of macroeconomic uncertainty on commercial banks' proactive risk-taking. We find that the development of fintech mitigates the dampening effect of macroeconomic uncertainty on commercial banks' proactive risk-taking. Specifically, fintech plays a mitigating role by motivating commercial banks to issue loans and hold transactional financial assets. With the increase of commercial banks’ proactive risk-taking, the mitigation effect of fintech monotonically diminishes. This mitigating effect is heterogeneous across different types of commercial banks, as it is relatively weak for banks with high capital adequacy ratios and large state-owned banks.

 

Risk perception, online search and consumption distortion

Wei Huang

Abstract

Using earthquake as an example, I investigate how risk perception affects household consumption with China Urban Household Survey data and Baidu index dataset. The empirical results show that consumption expenditure per capita drops by 25.2 yuan as the local search index of “earthquake” keyword increases by one standard deviation unit. These findings generally support the precautionary savings hypothesis. I also find media coverage of earthquake-related information drives the rise of the search index and the fall of household consumption. The results suggest that disaster events can seriously distort household consumption behaviors, and the economic costs of social panic can be even higher than the direct loss of disasters.

 

How minimum wage shortens employment terms?

Guangyuan Guo, Dongmin Hu, Huanhuan Wang, Ji Zhang

Abstract

The nationwide implementation of the minimum wage system in 1993 was followed by the “Minimum Wage Regulations” in 2004 with an attempt to enhance regulatory stringency of the system. The article constructs a theoretical model to establish testable propositions and conducts empirical analysis using China's Nutrition and Health Survey data to examine the impact of the minimum wage system on enterprise employment decisions. The findings reveal that the increase in the minimum wage has resulted in a shift towards short-term employment forms, and the strengthening of the minimum wage system in 2004 has further amplified this trend.

 

Opportunity of higher education and the choice of high schools

Chunbing Xing, Yan Sun, Chuliang Luo

Abstract

This research uses CHIP(China Household Income Project) data of 2018 to examine the impact of higher education opportunities on the middle school graduates’ choice between academic and vocational high schools. The findings indicate that a higher university quota at the provincial level increases the likelihood of middle school graduates choosing an academic high school, and the probability of choosing a vocational high school is negatively correlated with elite university opportunities in urban China. These results suggest that spatial differences in opportunities of higher education significantly influence the type of human capital investment at the high school stage in China.

 

The returns to computer use in the Chinese labor market

Yang Du, Peng Jia, Albert Park

Abstract

With rising wages and increasing maturity of computer technology, computer use in the workplace is becoming increasingly common. Based on data from an urban labor survey, 58 percent of urban workers used computers at work in 2016. Using computer price and density as instrumental variables, we identify the estimation bias from the simultaneous determination of computer use and its productivity effect. We further identify the productivity effect based on computer use frequency. With the above econometric issues taken into account, computer use at work significantly boosts labor productivity and increases workers' wage returns by 48.4 percent.

 

Covid-19 outbreak, ambiguity aversion, and macroeconomic expectations

King King Li, Bo Huang

Abstract

How will the outbreak of Covid-19 affect people's expectations on the macroeconomy? We conduct an online experiment in China to investigate the relationship between ambiguity aversion, risk aversion, and expectations about the macroeconomy after the onset of Covid-19 which can be considered an uncertainty shock. Our study differs from previous studies as we elicit individuals' preferences in terms of ambiguity aversion and risk aversion, and test how these preferences drive macroeconomic expectations. We find that ambiguity averse subjects are more pessimistic about the effect of Covid-19 on the economic growth rate. Ambiguity averse subjects are more likely to reduce consumption and expect lower savings in response to the outbreak. More risk taking subjects have more optimistic expectations on the macroeconomy, and they are less likely to reduce consumption, investment, and savings.