Sponsored by China Society of World Economics；Institute of World Economics and Politics
ISSN 1002-9621 CN 11-1138/F
12 issues per year
Discipline(s): Economics & Finance; Management
Current Issue: Issue 10, 2014
The Journal of World Economy is supervised by Chinese Academy of Social Sciences, and sponsored by China Society of World Economics, Institute of World Economics and Politics, Chinese Academy of Social Sciences. It aims to promote the development of China’s world economic theory and discipline construction. Its scope covers all fields of economics, including international economy, international finance, macroeconomics, international political economy, transition economics, development economics, regional and national economy, and China’s economic system reform. The Journal is included in CSSCI.
Vol 37,No. 10
In this study, the aggregate rate of return to capital (RRTC) in China during the period of 1978–2013 is estimated and the regression analysis on factors influencing the changes of the RRTC and the extent of influence is conducted on the basis of China’s provincial panel data. Furthermore, the causes of the changes of the RRTC after the outbreak of the global financial crisis in 2008 are decomposed in detail. Finally the following conclusions are drawn: (1) the RRTC shows obvious inertia; (2) the impact of government intervention is significantly negative; (3) the impact of investment rate on the RRTC is negative and statistically significant; and (4) the share of the secondary industry and that of the tertiary industry have significant positive impact on the RRTC. The sharp rise in the investment rate and the continuous expansion of government size significantly impact the sharp decrease in the RRTC in China after 2008.
Vol 37,No. 10
This paper studies the influence of the change of urban population size on labor’s income. We use China’s urban population growth from 1953 to 1982 as the instrumental variable of current urban population size and estimate the individual-level model of income determination. The estimation result indicates that each 1% growth of the urban size will lead to an increase of 0.190% and 0.189% in nominal annual income and nominal hourly income respectively. Even though the price change factor is considered, the influence of urban size on labor’s income is also significantly positive. The income-increase effect of urban population growth is not linear. Though labor force with different levels of income all benefits from the growth of urban size, the labor with the lowest income gets relatively smaller benefits, compared with medium and high income labor.
A study on the technology spillover of foreign direct investment and the threshold of China’s absorptive capacity
Vol 37,No. 10
This study adopts non-parametric data envelopment analysis to calculate the total factor productivity, and uses the threshold regression model to analyze the threshold effects of four factors reflecting the absorptive capacity on the technology spillover of foreign direct investment (FDI) in China, including economic development level, dependence on foreign trade, infrastructure construction and human capital level. This study finds non-linear threshold effects of all these four factors on the technology spillover of FDI. When the economic development level is higher, infrastructure is more complete and human capital level is higher, the technology spillover of FDI is more significant. Moderate dependence on foreign trade can promote the technology spillover of FDI, while if such dependence is too low or too high, the technology spillover of FDI will not be significant. In a majority of regions, infrastructure construction, which can achieve a great leap forward development within a short period of time, has reached a level that can facilitate the technology spillover of FDI, while the human capital levels, whose construction needs progressive development, are still not high enough for the absorption of advanced technologies brought by FDI.
Vol 37,No. 10
Food safety is decided by manufacturers’ investment in a variety of dimensions like raw materials and sanitary conditions. Due to information asymmetry, governmental regulation becomes a substantial means to solve the problem of manufacturers’ moral hazard. Highly differentiated food manufacturing technology (such as technological requirements in terms of biology, chemistry and physics) requests the establishment of corresponding governmental regulatory agencies. Shall these regulatory agencies which are differentiated due to technological difference implement independent, fragmented regulation or integrated regulation with unified policy? Based on the Chinese realities and from the perspective of the effects of regulation, this study compares the strengths and weaknesses of fragmented regulation and integrated regulation under the framework of a static three-player game. In general, integrated regulation is superior to fragmented regulation in reducing the probability of food safety incidents and regulating manufacturers’ behavior. Moreover, based on the research on regulation transformation, this study holds the view that the negative effect of regulation transformation on aggregate social welfare could be lowered by two-step transformation and successive transformation in different sectors.
Different effects of administrative power decentralization and fiscal power decentralization: based on the empirical evidence of China’s counties
Vol 37,No. 10
Based on the two experimental policies—“allocating more power to fast-growing counties” and “province governing counties directly,” this is the first article to distinguish the different effects of “administrative power decentralization” and “fiscal power decentralization” on counties’ economic growth. The research result shows that administrative power decentralization (allocating more power to fast-growing counties) promotes economic growth by attracting more new enterprises and increasing enterprises’ average rate of return while fiscal power decentralization (province governing counties directly) by increasing fiscal income. However, these two ways of power decentralization still depend on investment to stimulate economy and do not essentially improve enterprises’ productivity and resource allocation efficiency. The result further demonstrates that administrative power decentralization produce positive externality while fiscal power decentralization brings about negative externality. The possible reason of its negative externality is prefecture cities’ intensifying fiscal restriction on those counties that are not governed directly by province. Therefore, the government could attempt to expand the pilot scale of administrative power decentralization but be more careful about fiscal power decentralization’s negative effects on neighboring counties.