Workshop on:Anti-Globalization Risks and Their Impacts in the East Asia Time Zone （RIEBセミナー／六甲フォーラム／科研基盤研究（A）「タイムゾーンとサービス・タスク貿易理論の動学的展開および経済成長への含意」／科研基盤研究（B）「国際的買収による世界市場への参入とその動学的影響」／科研基盤研究（S）「グローバル経済におけるリスクの経済分析～国際経済学の視点から～」共催）
Workshop on:Anti-Globalization Risks and Their Impacts in the East Asia Time Zone (Jointly supported by: RIEB Seminar / Rokko Forum / Grant-in-Aid for Scientific Research (A)・(B)・(S))
A New Broom Skims the Cream: Zombie Firms and Tenure in China
Using 1998-2013 data of industrial enterprises and municipal party secretaries of prefecture-level cities, we find a U-shape relationship between the number or the percentage of zombie firms and the tenure of party secretaries. After a party secretary takes office, the number and the percentage of zombie firms grow up; three years later, the number and the percentage both go down.
The average tenure of our sample is 3.78 years. Therefore, we can illustrate the U-shape relationship as follows: when an official has just taken office, in order to get promoted, he will protect or allow the existence of zombie firms to maintain a stable environment and maximize GDP, then there will be more zombie firms. If this official doesn't get promoted and stay in office three years later, he will focus on financial revenue and face with pressures from firms in difficulty, in this case he will make his best to reduce the number of zombie firms by cutting subsidies or bank loans.
Production Chains, Exchange Rate Shocks and Firm Performance
Trade Diversion Is Reversed in the Long Run
We explore the role of economic growth as a cause of reverse trade diversion in an asymmetric multi-country Melitz model. Focusing on the three-country case and starting from the symmetric balanced growth path, we examine the effects of permanent decreases in the import trade costs of countries 1 and 2 from each other by the same rate. We obtain two main results analytically. First, the growth rate of country 3 decreases in the short run, but increases in the long run. Second, the revenue shares of varieties country 3 exports to countries 1 and 2 decrease in the short run, but increase in the long run.
Global Price Discovery in the Australian Dollar Market and its Determinants
Using intraday trading data over the period of January 1999 to December 2013, we examine the price discovery in the Australian dollar (AUD) market as well as its determinants. We employ a non-parametric Two-scale Realized Variance (TSRV) estimator to measure the global information distribution in trading of AUD. We find that the European market and U.S. market, particularly the overlapping trading session of London and New York, are the most important markets for price discovery in AUD market. However, despite its declining market share of daily transactions, Asia is rapidly gaining the information shares. In order to examine the determinants of information shares, we include macroeconomic news, order flow measures, as well as market state variables in the regressions. The empirical results confirm that more favorable market states and more unexpected order flows on macroeconomic announcement days make a significant contribution to the price discovery in AUD market. Furthermore, we document that a higher level of market integration and international consolidation contributes to the price discovery process in the long-run.
Housing Market Fluctuations and Interstate Trade in the United States
Trade in goods has been considered one important channel for spatial transmission of the housing crisis during 2007-2009 in US. However, it is less clear how the housing market fluctuations affect interstate trade. This paper studies the impact of housing wealth shocks on U.S. interstate bilateral trade, by applying the standard gravity equation to the 4-year-panel of interstate trade data. Two asymmetric effects emerge. First, we find the state exports are affected positively by the housing wealth shocks in destination markets but negatively by those shocks in origin states. Second, the destination demand effects are much stronger during the housing crisis than the booming period. Further study using disaggregated commodity and industry level trade data suggests that the effects of housing wealth shocks on interstate trade flows are stronger for durable goods and financial dependent industries.
Subjective and Objective Risks of Food Safety in China
Food safety has drawn plenty of attention in China. Though the official statistics show that food safety level has been continuously improved in the past 5 years, in terms of both food safety qualification rate and casualties of food safety incidents, public perception of food safety risks has not been improved. The discrepancy between objective and subjective food risks may be caused by ambiguity of food safety problems.
This paper empirically studies the determinants of public satisfaction on food safety risks , which is a proxy for subjective risks, with use of the Subjective Survey for Chinese Livelihood Index (SSCLI). We find that the regional effects are very small, while individual characteristics , such as, gender, hukou, marital status, income, employment status, education et al. play significant roles in determining the public satisfaction on food safety.