Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

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Welfare effects of public health insurance reform: The case of urban China
DING Jihong, ZHU Minglai
Front. Econ. China. 2007, 2 (3): 289-323.  
https://doi.org/10.1007/s11459-007-0016-y

Abstract   PDF (342KB)
This paper evaluates Chinese public health insurance reform enforced since 1998 in terms of its welfare effects. We evaluate China health insurance reform since 1998 using the China Health and Nutrition Surveys (CHNS) data with relevant econometric models. The results of empirical studies show that the public health insurance status has significant impact on medical service utilization and expenditure. The reform reduces the positive effect of public health insurance on medical service utilization, meaning the utilization gap is narrowed after the reform. However, the empirical studies find that the medical expenditure growth of the sample individuals in urban China has not been controlled after the Basic Medical Insurance (BMI) program even if a new co-payment is enforced. Two main reasons for this failure might be the rising cost of medical service and physician s severe moral hazard, while both of them come from no managed care mechanism for medical service providers in China.
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The performance of industrial productivity across regions of China: Structural differences, institutional shocks and dynamic characteristics
WANG Zheng, ZHENG Jinghai, SHI Jinchuan
Front. Econ. China. 2007, 2 (3): 324-345.  
https://doi.org/10.1007/s11459-007-0017-x

Abstract   PDF (545KB)
This paper is dedicated to probing into the dynamic performances of industrial productivity across regions of transitional China, using the panel data of provincial level. Based on the approach by Kumbhakar (2000), TFP (total factor productivity) growth is decomposed into four components. The main results are as follows. First, since 1988, the industrial TFP growth has been commonly accelerated across regions, with a rising technical change rate as the principal impetus. Second, meanwhile, technical efficiency and factors  allocative efficiency are deteriorated with scale efficiency switching from being retrogressive to being progressive. Third, although the SOE (state-owned enterprise) reform in the late 1990s has constituted a common shock to the industrial productivity, the eastern area with relatively few SOEs suffers the least from this policy enforcement. Fourth, by exploring the sources of productivity differences, we further confirm that the institutional shock launched by SOE reform in the late 1990s is crucial for the enhancement of scale effects as well as the temporarily rapid decline of factors  allocative efficiency; in addition, the educational level of the labor-force and the share of non-SOEs in the industrial output contribute positively to the acceleration of technical change and the improvement of allocative efficiency. The economic transition, accompanied by gradual institutional reforms, is reshaping the map of regional industrialization through various channels.
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Industrial agglomeration and difference of regional productivity
FAN Jianyong
Front. Econ. China. 2007, 2 (3): 346-361.  
https://doi.org/10.1007/s11459-007-0018-9

Abstract   PDF (316KB)
Locally increasing returns is the source of industrial agglomeration, and it improves regional labour productivity and drives up regional inequality. Using data of 261 cities in 2004 in China, I find that the estimated elasticity of (average) labor productivity with respect to employment density is about 8.8%, compared with 5% in the USA and 4.5% in the EU. Further, I find that the difference of agglomeration effects among provinces exists two cases: insignificant difference and significant difference. However, under the polarization of industrial location, both two cases enlarge the inequality of labor productivity among provinces, and drive up the divergence of regional income.
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Growth imbalance and government responsibility: From the perspective of social spending
ZHANG Xiaojing, WANG Hongju, CHANG Xin
Front. Econ. China. 2007, 2 (3): 362-387.  
https://doi.org/10.1007/s11459-007-0019-8

Abstract   PDF (418KB)
There exists a kind of growth imbalance in China s current development process, which is essentially characterized by the imbalance between the nation s wealth and the people s welfare. This paper points out that growth imbalance results mostly from insufficient government social spending on people s welfare. Consequently, the government should shoulder the basic responsibility for the provision of education, health and social security, quicken the transformation of government expenditure structure and increase the share of social spending, in order to improve the people s welfare and achieve the rebalancing of growth. The increase in social spending can also promote the accumulation of human capital, which will help the conversion of economic growth pattern and the realization of sustainable and healthy economic development.
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Does macro-economy have any effect on firm investment-cash flow sensitivities? —An empirical study based on panel data, 1993–2004
YING Weiwei
Front. Econ. China. 2007, 2 (3): 388-403.  
https://doi.org/10.1007/s11459-007-0020-2

Abstract   PDF (359KB)
We conduct an empirical study on Chinese listed firms  investment-cash flow sensitivities in different stages of the macroeconomic cycle during 1993–2004, and find that macro-economy has a significant effect on investment-cash flow sensitivities. When economic slowdown occurred between 1998 and 2001, sample firms reduced working capital substantially to maintain some necessary investment level of fixed assets, that is, firms stabilized fixed assets investment by adjusting working capital. However, the sensitivity coefficients of fixed assets investment to cash or sales revenue were not systematically higher in the depressed stage than in the booming stage.
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An empirical study on “the US-China trade deficit produced by FDI”
CHEN Jiyong, LIU Wei
Front. Econ. China. 2007, 2 (3): 404-423.  
https://doi.org/10.1007/s11459-007-0021-1

Abstract   PDF (394KB)
This article makes an empirical study on the magnifying effect produced by foreign direct investment (hereafter called as FDI) on the US-China trade deficit through co-integration analysis and error-correction modeling. By combining the empirical results, we give out our own opinion that the expansion of the US-China trade deficit is supposed to partly ascribe to the fact that processed industry is the main path of FDI and to Counter sales and trade diversion which are produced by exports on reproduced production by foreign enterprises in China. On the above-mentioned basis, this article concludes that in order to reduce the US-China trade deficit effectively, we are supposed to expand our domestic demand, perfect our inviting-investment policies, implement FDI in China and quicken up the going out  of our enterprises.
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Endogenous licensing in cumulative innovation
KOU Zonglai, ZHANG Jian
Front. Econ. China. 2007, 2 (3): 424-457.  
https://doi.org/10.1007/s11459-007-0022-0

Abstract   PDF (546KB)
This paper analyzes the endogeneity of licensing arrangements in cost-reducing cumulative innovation. There exists the following results. First, for the first-generation patentee, ex post licensing matters for rent extraction while ex ante licensing matters for efficiency. Second, if the second-generation innovator does not exit, then the firms  profits as well as social welfare are all irrelevant to whether ex ante licensing is allowed. Third, costly litigation can occur on the equilibrium path and its occurrence is also irrelevant to ex ante licensing. Interestingly, the conditional probability of the first-generation patentee winning litigation first decreases and then increases in patent breadth. Fourth, optimal patent breadth depends on the tradeoff between litigation costs and antitrust effect.
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A method for analyzing strategic product launch
XIAO Junji
Front. Econ. China. 2007, 2 (3): 458-464.  
https://doi.org/10.1007/s11459-007-0023-z

Abstract   PDF (238KB)
This paper proposes a method to analyze how the manufacturers make product launch decisions in a multi-product oligopoly market, and how the heterogeneity in their products affects the manufacturers  decisions on model launch and withdrawal.
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Total Factor Productivity in Chinese agriculture: The role of infrastructure
CHEN Weiping, DING Ying
Front. Econ. China. 2007, 2 (3): 465-465.  
https://doi.org/10.1007/s11459-007-0024-y

Abstract   PDF (125KB)
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9 articles