China Journal of Economics

 

Current Issue

  • Industrial Agglomeration and Household Financial Risk Investment

    Linlin Xie;Weixing Wu;University of International Business and Economics;Capital University of Economics and Business;

    The regional pattern of industrial agglomeration exerts a critical influence on the economic well-being of local households, thereby shaping their financial decision-making behavior. Drawing on data from the China Household Finance Survey(CHFS) spanning 2013—2019, this paper examines the impact of industrial agglomeration on household financial investment decisions by integrating household location, employment industry, and investment behavior. The results indicate that households employed in locally agglomerated industries are more likely to invest in risky assets. Heterogeneity analysis further reveals that this effect is more pronounced among households facing lower labor risks, those employed in the service sector, and those residing in urban areas. Mechanism analysis suggests that industrial agglomeration operates through enhancing income stability, improving human capital, and increasing credit availability. This study extends the literature on the influence of local industrial structure on household financial decisions and provides empirical evidence and policy implications for optimizing industrial layout and fostering regional financial market development.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1075K]

  • The Effect of Personal Bankruptcy Policies on Household Consumption: Evidence from CFPS Data

    Jia He;Jiarui Wang;Weilun Tian;School of Finance, Nankai University;School of Business, Zhengzhou University;

    Using data from the China Family Panel Studies(CFPS) between 2016 and 2022, this paper empirically investigates the influence of personal bankruptcy policies on household consumption in China. By leveraging the introduction of pilot bankruptcy programs as a quasi-natural experiment and applying a difference-in-differences(DID) approach, the results show that the implementation of personal bankruptcy systems significantly increases household spending. The results remain robust after accounting for potential biases and conducting various robustness tests. Further analysis reveals that the primary mechanism is through reducing residents' precautionary savings motives. Specifically, the system enhances households' risk appetite and diminishes the tendency to save as a buffer against income and health uncertainties, thereby encouraging higher consumption levels. Heterogeneity analysis shows that the positive effect is stronger among individuals with higher education, larger families, and residents in regions with greater market integration or more developed service sectors. Additionally, the policy promotes consumption related to household development and reduces the Engel coefficient, indicating improved living standards. Importantly, the policy has not led to significant household over-indebtedness. Overall, this paper contributes to understanding the economic benefits of personal bankruptcy policies and offers policy insights to boost household consumption and stimulate domestic demand.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1131K]

  • Risk Event Experience and Household Consumption Behavior: Based on the Perspective of Group and Individual Differences

    Xiaomeng Lu;Yisheng Lu;Yaling Li;Survey and Research Center for China Household Finance, Southwestern University of Finance and Economics;School of Economics, Sichuan University;Department of Investment Banking and Strategic Clients,Sichuan Bank;

    From the perspective of the difference between group and individual risk events, this paper makes a comparative study of the impact of two types of risk event experiences on household consumption behavior and the mechanisms behind it. Based on CHFS nationally representative 5-round unbalanced panel microdata, we conduct a detailed empirical analysis using the PSM-DID method. We find that group risk experience and individual risk experience have entirely different impacts on household consumption behavior. Households experiencing individual risk events exhibit a significant increase in total consumption, particularly in medical expenditure, whereas households experiencing group risk events do not display significant changes in their consumption behavior. Further analysis shows that the lack of sufficient government support and limited social interaction for households experiencing individual risk events are key reasons for the differences in consumption behavior between the two types of households. The heterogeneity analysis indicates that changes in household consumption after risk events vary depending on factors such as household support burdens, government medical security levels, and social characteristics. The conclusion of this paper shows that government relief and social interaction positively affect households' consumption behavior, and the government needs to fully consider the differences between different types of risks when formulating risk treatment measures.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1090K]

  • Pension Planning and Household Consumption: Theory and Evidence

    Daping Zhao;Li Shi;Ningwei Zhou;Linwan Zhang;School of Finance, Capital University of Economics and Business;

    “Old-age support” is not only a fundamental need for the elderly but also a crucial expectation for those not yet old. Therefore, retirement planning is inevitably an important variable in the welfare function at the household level. Existing literature often treats pensions as predetermined benefits, overlooking the potential impact of residents' proactive planning on household consumption. This paper categorizes residents' retirement planning into familial old-age planning, social old-age planning, and self-old-age planning. By constructing a three-period overlapping generations(OLG) model, it theoretically analyzes the impact of residents' retirement financial planning on household consumption levels and empirically tests this using data from the China Household Finance Survey(CHFS). The study demonstrates that different types of retirement planning have varying effects on household consumption: familial old-age planning suppresses household consumption through bequest motives, social old-age planning promotes household consumption via job stability and precautionary saving motives, while self-old-age planning fosters household consumption through risky financial asset investments and the effectiveness of asset allocation. Heterogeneity analysis reveals that in households with closer family ties, the suppressive effect of familial old-age planning on consumption is more pronounced; in households with lower human capital and those in rural areas, the promotional effect of social old-age planning on consumption is more significant; and in households without liquidity constraints, the promotional effect of self-old-age planning on consumption is more evident. The findings of this paper provide Chinese marginal micro-evidence for consumption theory under the overlapping generations framework and offer academic insights into how to unleash consumption potential against the backdrop of population aging.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1108K]

  • The Impact of Pension Reform in Government Institutions and Public Service Units on the Demand for Commercial Pension Insurance: From the Perspective of Economic Uncertainty

    Xuanyi Zhang;Tianyi Li;Zhengwei Wang;Management World Magazine;Department of Economics, Party School of the Central Committee of the Communist Party of China (Chinese National Academy of Governance);PBC School of Finance, Tsinghua University;

    Utilizing a Dynamic Stochastic General Equilibrium(DSGE) model, this paper examines the effects of pension reform in government agencies and public institutions on the demand for commercial endowment insurance. The research indicates that after the reform, the demand for commercial endowment insurance among employees diminishes in the steady state, yet consumption remains stable, suggesting a substitution effect with basic endowment insurance and occupational annuity. In reaction to unforeseen temporary technological shocks, the demand for commercial endowment insurance fluctuates less initially and then more after the reform, compared to the pre-reform period. This occurs because basic endowment insurance and occupational annuity are compulsory, with contributions being a fixed percentage of income, whereas commercial endowment insurance is optional, with employees making contribution decisions based on utility maximization. The varying intensities of their reactions to technological shocks result in different fluctuations in the demand for commercial endowment insurance before and after the reform. Counterfactual simulations indicate that a higher employer contribution rate(or individual contribution rate) for basic endowment insurance correlates with an increased(or decreased) demand for commercial endowment insurance in the steady state. In addition, the higher the employer contribution rate of occupational annuity, the lower the demand for steady-state commercial pension insurance; the higher the individual contribution rate, the lower the demand for steady-state commercial pension insurance. Moreover, minor differences in contribution rates have a limited impact on the volatility of commercial pension demand under technology shocks, thereby leaving room for gradual reform. This paper offers substantial insights into understanding the interplay between various types of endowment insurance and enhancing the pension financial system.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 2438K]

  • Economic Development in China and the United States: Linkages and Changes in Spillover Effects

    Wenqing Pan;Wenqing Zhang;Yuanhang Hao;School of Economics & Management, Tsinghua University;National Center for Economic Research at Tsinghua University;

    This paper constructs a three-economy input-output model for China, the United States, and the rest of the world based on Global Input-Output Tables from 1997 to 2020, analyzing the medium- and long-term change characteristics of domestic multiplier effects, inter-country feedback effects, and spillover effects on the real output and output growth of China and the United States. The results show that domestic multiplier effects explain more than 80% of output growth in both countries, but inter-economy spillover effects have become a non-negligible influencing factor. The three types of effect coefficients indicate that China's domestic industrial linkages and external connectivity are stronger than those of the United States. Additionally, China's output growth relies more on changes in the three types of coefficients, while the United States depends more on changes in its own final goods production scale. Further analysis of spillover effects reveals that China's spillover impact on the United States is increasing, while the U.S. spillover impact on China is decreasing, and the mutual spillover effects between China and the rest of the world are both strengthening. These characteristics are also evident across the eight primary industrial sectors. In the future, the risk of economic “decoupling” between China and the United States remains high, and strengthening economic ties between China and other global economies is a necessary path for China's sustained and healthy economic development.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1609K]

  • Salience Theory and Stock Return

    He Song;Yuanqing Zhang;Peiyuan Tang;School of Finance, Shanghai University of International Business and Economics;School of International Business, Shanghai University of International Business and Economics;

    Based on the asset pricing model of the salience theory, this paper selects the stock data of China's A-share market from 2007 to 2021, uses the stock return to construct the salience theoretical indicator—ST, and tests whether the ST has the ability to predict stock returns in cross-section. The results of portfolio analysis and Fama-MacBeth regression analysis show that the ST has a significant ability to predict returns in cross-section, and the ST is significantly negatively correlated with the future earnings of stocks, this result remains significant after controlling for firm size, book-to-market ratio, market risk and a series of factors. From a further analysis, there is a significant salience effect in China's A-share main board market, while the salience effect in the GEM market during the same period is not significant. This difference is derived from diverse investor structure, and the salience effect is less significant along with the upward trend in the proportion of institutional owners and the alleviation of arbitrage restrictions. This study is of great significance in enriching the application of salience theory in the Chinese capital market and guiding investors to establish correct investment concepts.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1059K]

  • Political Turnover, Expectations of Policy Stability and the Effectiveness of Industrial Policy

    Jietong Lin;Xin Wang;Institute of New Structural Economics, Peking University;

    This paper constructs a model illustrating how irregular political turnover impedes entrepreneurs' response to industrial policies by affecting their expectations on policy stability, thus inhibiting the effectiveness of industrial policies. Empirical analyses based on Chinese Industrial Enterprise Database shows that:(1) industrial policy measured by subsidies significantly improves the TFP of subsidized enterprises, but the effect declines with increasing irregularity of political turnover,(2) the effect is not driven by officials' tenures or local economic conditions,(3) the effect is more pronounced for domestic, private and small enterprises, industries with higher level of investment irreversibility, and in regions with a lower proportion of central-supported industries and lower administrative level, and(4) irregular political turnover influences the incentive effect of industrial policy on enterprises' expansion decisions and investment efficiency.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1146K]

  • Network Infrastructure and the Development of Digital Enterprises

    Wenkai Sun;Siyuan Tang;School of Economics, Renmin University of China;

    This paper investigates the impact of network infrastructure on digital entrepreneurship using panel data from 295 Chinese cities(2005—2020) and a multi-period difference-in-differences design, exploiting the rollout of the “Broadband China” strategy as a quasi-natural experiment. The policy increased the share of digital enterprises by 2.97 percentage points on average, indicating that better infrastructure fosters regional digital entrepreneurship. The effect is stronger for small and micro firms, and network improvements encouraged new entries even in markets dominated by large incumbents. Heterogeneity analysis shows greater effects in cities with more university students and in industries with higher digital intensity. Mechanism tests suggest that network infrastructure promotes digital entrepreneurship by enhancing coverage quality, enlarging digital markets, and lowering transaction costs.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1196K]

  • Value-Added Tax Sharing, Financial Incentives and Tax Burden Stickiness of Manufacturing Enterprises

    Jie Li;Hongshu Hu;School of Public Finance and Public Administration, Hubei University of Economics;Hubei Local Taxation Research Center;School of Public Finance and Taxation, Zhongnan University of Economics and Law;

    The fiscal relations between governments are mainly characterized by tax sharing and power division. It is of great significance to explore the factors affecting the stickiness of enterprise tax burden from the perspective of tax sharing for relieving the pain of tax burden of manufacturing enterprises. Based on the “50/50 sharing” reform of VAT in 2016, this paper constructs an intensity DID model and takes China's A-share manufacturing listed companies from 2012 to 2022 as research samples to empirically test the impact of VAT sharing on the stickiness of corporate tax burden and its mechanism. It is found that the increase of local tax sharing ratio simultaneously produces the effect of tax collection and administration strengthening and financial assistance, and will eventually ease the stickiness of corporate tax burden, and this effect is more obvious in regions with less financial pressure, foreign-funded enterprises and enterprises with high tax compliance.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1309K]

  • The Institutional Foundations of Digital Industry Development: Insights from Intellectual Property Protection

    Nan Lin;Bo Ning;Thi Thu Ha Nguyen;Shihe Liang;School of Finance, Fuzhou University of International Studies and Trade;School of Management, Xiamen University;

    Accelerating the development of the digital industry is a vital task for China to seize the commanding heights of international competition in the new era. Given the intangible, replicable, and easily infringed nature of digital technological achievements, strengthening the protection of digital intellectual property is particularly critical. This paper leverages the ongoing efforts to improve China's judicial system for intellectual property protection and exploits the staggered establishment of specialized intellectual property courts and tribunals(IPCs) across various regions since 2014 as a quasi-natural experiment. Based on a comprehensive dataset covering over 50 million new enterprises, we find that the introduction of IPCs significantly enhances the vibrancy of digital industry development in the jurisdictions concerned, as evidenced by a 12.5% increase in the share of digital startups among all newly founded firms. Mechanism analysis shows that stronger judicial protection of digital property rights boosts the innovation motivation of digital talent and the investment willingness of investors, thereby facilitating more digital innovation outcomes that underpin digital industrial growth. Heterogeneity analysis indicates that these effects are more pronounced in regions with stronger intellectual resources, more mature financial markets, and more proactive local policy and fiscal support. Finally, in terms of economic consequences, judicial empowerment of digital industry development significantly contributes to regional economic growth, making it an important driver of local development in the new era. This study provides robust evidence for the positive impact of judicial intellectual property protection on the development of the digital industry and offers important policy implications for China to gain a first-mover advantage in the global digital economy.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1251K]

  • Mainstream Media Participation in Public Accountability and Enterprise Emission Restraint: Evidence from “Policy Advising on Television”

    Ziheng Niu;Huan Jin;School of Economics, Shandong University of Finance and Economics;School of Economics, Nanjing University of Posts and Telecommunications;

    Public participation is an important third-party force in environmental governance. However, due to the decentralized and fragmented characteristics of public participation in environmental governance, and the obvious power asymmetry between public participation and local governments, the effect of public participation in environmental governance is limited. From the perspective of expanding the influence of public participation in environmental governance, this paper introduces a quasi-natural experiment on the promotion of “policy advising on television” programs, and makes use of enterprise micro-database to explore the impact of mainstream media participation in public accountability on enterprise pollution emissions and its mechanism. Furthermore, from the perspective of strengthening program effects, this paper further tests the realization path of improving program quality. The research finds that the promotion of “policy advising on television” programs effectively restricts the pollution emission of enterprises. Among them, promoting enterprises to strengthen environmental governance and forcing enterprises to withdraw are important mechanisms. At the same time, in the high industry competition environment or when the government is facing greater financial pressure, the effect of the promotion of “policy advising on television” to promote the pollution reduction of enterprises is weakened. In addition, the further discussion shows that setting up evaluation mechanism in this kind of program, increasing the broadcast frequency of this kind of program and broadcasting in the prime time of the evening will help to strengthen the effect of this kind of program. The relevant research conclusions of this paper emphasize the importance of mainstream media in the process of public participation in environmental governance, which is a useful supplement to the existing research on public participation in environmental governance, and also provides a certain reference for the government to further improve the environmental governance system from the perspective of a third party.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1276K]

  • Marriage Squeeze and Health: Health Predicaments of Unmarried Population under Gender Imbalance

    Hang Zhang;Chuanchuan Zhang;National Academy of Economic Strategy, Chinese Academy of Social Sciences;School of economics, Zhejiang University;

    Based on the survey data of the China Family Panel Studies(CFPS) and county-level data from the Chinese Population Census in 2010, this paper analyses the impact of gender imbalance on the marriage rate and metal health among marriageable populations. The results show that the rise in gender imbalance significantly reduces the marriage rate among marriageable populations, with males and rural residents being the most affected. The decreased marriage rate due to gender imbalance significantly increases the likelihood of unmarried individuals experiencing depressive emotions. The negative impact of being unmarried on mental health primarily occurs within the older unmarried population, low-income population and rural residents.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1060K]

  • How Does Household Debt Affect the Labor Participation of the Elderly Population

    Cheng Zhang;Xiaohong Ling;Xiyan Weng;School of Business, Shantou University;Institute for Economic and Social Research, Jinan University;

    Against the backdrop of deepening population aging and rapidly increasing debt in the residential sector, this article uses data from the China Family Panel Studies(CFPS) to explore the impact of household debt on labor participation of the elderly population. The empirical analysis results indicate that household debt has a negative effect on the retirement of the elderly population, and a positive effect on the labor participation of the elderly population. The mechanism analysis results indicate that alleviate the credit and liquidity constraints caused by household debt, elderly households tend to increase labor supply and delay retirement. In addition, heterogeneity analysis results indicate that household debt is more sensitive to the impact of labor participation decision-making on the elderly population with lower education levels, physical health, housing ownership and children's income level. This study provides a new perspective for understanding the labor participation decision-making, and delayed retirement of the elderly population, and provides useful reference for relevant departments to formulate employment policies for the elderly population.

    2025 04 v.12;No.48 [Abstract][OnlineView][Download 1128K]

  • 2025 04 v.12;No.48 [Abstract][OnlineView][Download 238K]
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