This study examines how digital transformation (DT) affects firms' internal incentive structures in China from 2010 to 2019. Unlike prior research, we assess firms' DT progress through participation in a nationwide DT certification program. Using a variety of empirical methods, we analyze how DT affects the compensation of both executives and workers, controlling for labor productivity, financial performance, and other firm characteristics. Our results indicate that: (i) DT significantly increases average worker compensation; (ii) this increase stems from compositional shifts toward hiring more skilled workers and creating additional non-routine jobs; (iii) contrary to skill-biased or routine-biased technological change predictions, DT raises worker compensation without uniformly reducing low-wage jobs in absolute terms; (iv) DT realigns incentive structures by linking corporate growth to executives' future compensation rather than current pay; and (v) DT reduces both the absolute and relative compensation gaps between executives and workers.

Lifting smallholder farmers out of poverty depends largely on boosting their agricultural operating incomes, a persistent challenge despite numerous efforts. This study evaluates the impact of China's "E-Commerce into the Countryside" (ECC) program-the first and largest e-commerce initiative in the developing world-on both the level and distribution of smallholders' farm earnings. Employing a quasi-experimental design, we find that the ECC program significantly increases household per capita agricultural operating income. We show that this gain is driven by expanded market access through online sales, which facilitate income growth via three primary mechanisms: operational scale expansion, higher output prices, and a shift toward high-value-added crops. However, these benefits are unevenly distributed. The program also widens the income gap among smallholders, a disparity largely attributable to pre-existing differences in human, productive, and digital capital. Our findings highlight that e-commerce policies, while potent for income generation, require complementary measures to mitigate disparities that arise from heterogeneous initial endowments.

Long-term economic growth in impoverished regions has been a critical research and policy concern. Smallholder farmers require access to modern marketing and commercialization channels to transition from subsistence farming and break the shackles of poverty. Agricultural certification provides an avenue to enhance the value of farm produce and eliminate market impediments. This paper examines the impact of an agricultural certification policy implemented in China on the economic growth of poor counties. A two-way fixed-effects model was utilized along with an instrumental variable approach. We find that the agricultural certification policy contributes to economic growth in these areas and that the effects are robust to various biases and endogeneity concerns. The policy fosters rural economic growth by increasing product premiums and employment opportunities. The effects are more pronounced in non-minority counties or those with greater market access. Additionally, the policy yields favorable effects on the surrounding air quality.

Pro-poor policies can have economic benefits, but they may also have environmental costs. This paper examines the impact of China’s “E-commerce into Countryside” project (the ECC project), one of the world’s largest targeted poverty alleviation strategies, on local air quality. The project covers approximately 100 million poor people. Using a set of difference-in-differences identification strategies, we find that the pro-poor ECC policy has consistently and significantly contributed to local air pollution, despite its role in fighting poverty. The decline in local air quality is primarily caused by the increase in rural enterprises, destruction of vegetation, and traffic pollution resulting from the intention to sell more agricultural products to the city. Pro-poor policymakers face the challenge of balancing poverty reduction with environmental protection during the process of sustainable development. When making policy decisions, it is important to consider local environmental regulations, ecological vulnerability, and potential adaptation strategies in order to weigh economic benefits against environmental costs.

The private sector contributes the majority of China's GDP, with family firms responsible for most of the contribution. Prior studies find that firms' family control is influenced by certain cultural norms, such as family ties. This study explores the underlying historical and agricultural roots of these cultural norms that influence modern businesses. Combining a set of high-quality, nationally representative Chinese firm and household surveys with prefectural data, we first show the positive impact of rice farming on family control of local firms. We establish robust causal inferences by exploring the impact of historical agricultural legacies and discussing alternative measures, spatial autocorrelations, omitted variables, instrumental variables and self-selection. More importantly, our results demonstrate that the rice cultivation practice enhances the local people's preferences for strong family ties. Instead of claiming a direct role of these cultural traits as in the existing literature, we recast them as cultural mediators and persistent channels through which historical rice farming can shape contemporary corporate structure.

Using transaction-level data from a large online lending marketplace, we explore the role of homophilous intensity in online lending and uncover the evidence of a significant impact of homophily on the bidding behavior and economic effects of both lenders and borrowers. Lenders are more likely to invest in borrowers with more homophilous traits, and homophily induces higher bidding amounts. Moreover, lenders charge lower prices to more homophilous borrowers, but are able to earn higher returns due to better repayment from these borrowers. Our findings suggest that homophilous intensity has a statistically and economically significant effect on both borrowers and lenders in the online lending environment.

Based on three waves of a nationwide household survey in China, we demonstrate that social networks facilitate household financial market participation and risky asset holding. By constructing an index that considers various dimensions of social networks, our extensive empirical analysis suggests that a higher value of the social network index significantly increases the probability of a household's market participation and the fraction of risky assets holding in both formal and informal financial markets. This finding is robust across different waves of survey data; it is also robust to alternative index construction, estimation techniques, and variable definitions. We derive explicit expressions for the coefficients and standard errors of the interaction effects in the Probit and Tobit models and reveal that the impact of social networks is transmitted to household financial decisions through two channels: an information channel and a risk-sharing channel.

Launched in 2017 the Green Belt and Road policy acts as an important upgrade to China’s recent core foreign strategy (i.e., the Belt and Road Initiative) and aims to balance the economic development and environmental harmony in countries along the routes. In this paper, we take the implementation of this green policy as a quasi-natural experiment and employ a difference-in-difference method to identify the impact of the policy on Chinese outward direct investment (ODI) firms. We find that the policy has a significant and robust effect on improving the overall performance of ODI firms. Under the same policy roof, however, the seemingly similar impact masks the distinct responses of state-owned and non-state-owned enterprises. Non-state-owned enterprises improve their performance by pursuing green credits and technology upgrades. State-owned enterprises achieve improved performance through better compliance with the green policy and the accompanying government subsidies, in addition to technology upgrades.

This article examines the evolving finance-inequality nexus during the process of economic transition. We estimate the varying marginal effects of financial depth on income inequality in every state of the transition process. Using China as an example of transition economies, we establish the causal effects of financial depth on urban income inequality and examine the estimation biases when the evolving relationship is not appropriately characterized. Along the transition process of the Chinese economy, we identify a robustly asymmetric and roughly inverted-L shaped relationship between financial depth and urban inequality. We find that financial depth alone accounts for 11-28% of the overall variations of urban income inequality and the marginal impacts of financial depth change with the degree of credit constraint, the fraction of state ownership, and the level of economic development.

PURPOSE:Postoperative delirium is a serious and common complication, it occurs in 13-50% of elderly patients after major surgery, and presages adverse outcomes. Emerging literature suggests that dexmedetomidine sedation in critical care units (intensive care unit) is associated with reduced incidence of delirium. However, few studies have investigated whether postoperative continuous infusion of dexmedetomidine could safely decrease the incidence of delirium in elderly patients admitted to general surgical wards after noncardiac surgery. PATIENTS AND METHODS:This double-blind, randomized, placebo-controlled trial was conducted in patients aged 65 years or older undergoing major elective noncardiac surgery without a planned ICU stay. Eligible patients were randomly assigned to receive either dexmedetomidine (0.1 μg/kg/h) or placebo (0.9% normal saline) immediately after surgery though patient-controlled intravenous analgesia device. The primary outcome was the incidence of delirium during the first 5 postoperative days. Secondary outcomes included postoperative subjective pain scores and subjective sleep quality. The study dates were from January 2018 to January 2019. RESULTS:A total of 557 patients were randomly assigned to receive either dexmedetomidine (n=281) or placebo (n=276). The incidence of postoperative delirium had no difference between the dexmedetomidine and placebo groups (11.7% [33 of 281] vs 13.8% [38 of 276], P=0.47). Compared with placebo group, patients in dexmedetomidine group reported significant lower numerical rating score pain scores at 3, 12, 24, and 48 hrs after surgery (all P<0.05) and significant improved Richards Campbell Sleep Questionnaire results during the first 3 postoperative days (all P<0.0001). Dexmedetomidine-related adverse events were similar between the two groups. CONCLUSION:Postoperative continuous infusion of dexmedetomidine did not decrease the incidence of postoperative delirium in elderly patients admitted to general surgical wards after elective noncardiac surgery.

We re-estimate the capital-labor elasticity of substitution and the biased factor-augmenting technological progress using a system approach for the aggregate U.S. economy from 1948 to 2010. Due to (i) the significant impacts of labor market dynamics on economic growth and (ii) the fundamental tension between the short-run data that are available and the long-run parameter that is required in the estimation process, we incorporate labor market friction into a supply-side system to re-estimate these important growth parameters and to explore their sensitivity to the incorporation of labor market friction. Our estimation obtains a significantly smaller-than-unity elasticity of substitution. This result is consistent with labor input measured along the extensive and intensive margin, and in both competitive and imperfect labor markets. Technological progress tends to be purely labor-augmenting, with the average growth rate around 2% per year. These findings are robust to alternatively constructed data sets and different estimation strategies.

This note studies a parsimonious dynamic stochastic general equilibrium model driven by demand shocks to explain two central puzzles in open-economy macroeconomics: the comovement puzzle (Backus et al., 1992) and the Backus-Smith puzzle (Backus and Smith, 1993), while matching a large set of domestic and international business cycle properties observed in the industrialized countries. Features such as non separable preferences, non-tradable sector, or market incompleteness do not appear to be preconditions for resolving these long-standing puzzles. (C) 2017 Elsevier B.V. All rights reserved.

Using a simple theoretical model, this paper provides a micro-foundation of applying vector auto-regressive (VAR) models to explore the effects of monetary shocks on stock market fluctuations. We analytically show that, when monetary shocks change investors’ wealth and portfolio liquidity, their degree of risk aversion associated with wealth and liquidity changes accordingly, which is then channeled to their investment decision and finally to the stock market fluctuations. Both the wealth effect and liquidity effect of monetary shocks have inter-temporal impacts on stock pricing. Therefore, monetary shocks and stock price fluctuations should be treated as a unified vector system that is auto-correlated. Based on the theoretical analysis, this paper further studies the impacts of different forms of monetary shocks on the Chinese stock market over the period 2005 to 2012 with a non-linear VAR model. We find that monetary shocks in China have significant and asymmetric effects on the stock market performance over different market cycles. Our estimation suggests that changes in monetary policy may increase stock market volatility, even though these monetary policies are often aimed at stabilizing the Chinese macro-economic activities.

This paper explores the role of demand shocks, as an alternative to productivity shocks, in driving both domestic and international business cycles within the international real business cycle (IRBC) framework. In addition to those well-documented domestic business cycle fluctuations (e.g., the volatility and cyclicality of output, consumption, investment, labor hours, and labor productivity) and international business cycle properties (e.g., the countercyclical net export and the comovement puzzle), this paper focuses on two additional stylized facts in the industrialized countries: the procyclical trade openness (the GDP fraction of trade volume) and the countercyclical government size (the GDP fraction of government spending). Using a parsimonious dynamic stochastic general equilibrium model, we show that the model׳s predictions under productivity shocks are not consistent with these facts. Instead, a demand-shock-driven model replicates the above facts while matching other domestic and international business cycle properties. An estimated version of the model confirms the quantitatively important impacts of demand shocks.

This paper examines the long-run relationship between trade openness and government size in a two-country dynamic general equilibrium model. We analytically show that different factor intensities in the production of tradable and nontradable sectors affect the government's response to changes in trade openness. Specifically, if the production of the nontradable sector is more capital-intensive, a positive relationship between trade openness and government size will be observed. In contrast, if the production of the tradable sector is more capital-intensive, a negative correlation between trade openness and government size will arise. This theoretical prediction is robust to both utility-enhancing and productive government expenditures. The differentiated factor intensities therefore provide a potential explanation to the mixed empirical findings in the literature about the long-run relation of trade openness and government size.

Using a nonparametric panel data model, this paper estimates the degree of time-varying and province-specific capital mobility in China during 1970-2006. We estimate the savings-investment association, that is, the savings retention rate a la Feldstein and Horioka, as a measure of capital mobility. We also split the total savings (investment) into private and government savings (investment) to explore the role of government in improving capital mobility. Over time, we find an improvement in capital mobility after the mid-1990s. Across provinces, we observe higher capital mobility in eastern/coastal regions. From the 1990s, the government is found to play a less important role in promoting capital mobility. Across provinces, the government is found to be more important in either the municipalities (Shanghai and Beijing) or the less developed inland provinces.

In this paper, we study the effect of monetary shocks on the Chinese stock market over the period of 2005 to 2011 with the MSVAR–EGARCH model. The evidence suggests that Chinese monetary policies have significantly asymmetric effects on the stock market in different time periods and market cycles. The effects of shocks from interest rate and reserve rate vary across market cycles but effects from money supply and exchange rate do not. Empirical evidence from the non-linear model shows that monetary policy changes increase stock market volatility, even though these monetary policies are often aimed at stabilizing macro-economic activities. The evidence suggests that both the market conditions and the effects on stock markets should be taken into consideration in monetary policy design and implementation.

There is an upsurge of trend in studying the internationalization strategy (IS) of firms from China in international business (IB) research area. However studies which have done on Chinese firms in ...

This paper centers on the measurement of the time-varying efficiency of foreign direct investment (FDI) in China from 1981 to 2004. I modify the standard stochastic production frontier approach to isolate the estimate of the technical efficiency of FDI, The estimations show that the FDI technical efficiency exhibits a U-shaped time pattern, i.e.. there is efficiency deterioration in the early stage of China's reform and a gradual efficiency improvement after the mid-1990s. However, this U-shaped time pattern disappears when technical change (changing frontier) is taken into account.