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Frontiers of Economics in China

, Volume 2 Issue 1

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Using Data Envelopment Analysis approach to estimate the health production efficiencies in China
ZHANG Ning, HU Angang, ZHENG Jinghai
Front. Econ. China. 2007, 2 (1): 1-23.
Abstract   PDF (383KB)
By using Data Envelopment Analysis approach, we treat the health production system in a certain province as a Decision Making Unit (DMU), identify its inputs and outputs, evaluate its technical efficiency in 1982, 1990 and 2000 respectively, and further analyze the relationship between efficiency scores and social-environmental variables. This paper has found several interesting findings. Firstly, provinces on frontier in different year are different, but provinces far from the frontier keep unchanged. The average efficiency of health production has made a significant progress from 1982 to 2000. Secondly, all provinces in China can be divided into six categories in terms of health production outcome and efficiency, and each category has specific approach of improving health production efficiency. Thirdly, significant differences in health production efficiencies have been found among the eastern, middle and western regions in China, and among the eastern and middle regions. At last, there is significant positive relationship between population density and health production efficiency but negative relationship (not very significant) between the proportions of public health expenditure in total expense and efficiency. Maybe it is the result of inappropriate tendency of public expenditure. The relationship between abilities to pay for health care services and efficiency in urban areas is opposite to that in rural areas. One possible reason is the totally different income and public services treatments between rural and urban residents. herefore, it is necessary to adjust health policies and service provisions which are specifically designed to different population groups.
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Foreign trade, local protectionism and industrial location in China
HUANG Jiuli, LI Kunwang
Front. Econ. China. 2007, 2 (1): 24-56.
Abstract   PDF (532KB)
In this paper, we find that, in China, geographical changes of industrial bases in the 1980s had led to a slight drop in the extent of specialization and location imbalance, but in 1990s the specialization and industry imbalance have further developed. The geographical advantage for trade has a significant impact on the location patterns, and the effects of local protectionism are confined to the hinterland in 1990s. The role of comparative advantage in shaping industry location is evident, and some predictions derived from new economic geography are partially supported.
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An analysis of China’s global industrial competitive strength based on vertical specialization
ZHANG Xiaodi, SUN Jingwei
Front. Econ. China. 2007, 2 (1): 57-73.
Abstract   PDF (387KB)
At the beginning of the 1990s, China witnessed an increase in its international competitive strength in technology-intensive and capital-intensive industries, and a decrease in strength in labor-intensive industries. This paper analyzes the effect of vertical specialization on China s international industrial competitive strength, explores how different industries have varying reactions under its implementation, and employs theory to explain the possible causes of these reactions. It is found that vertical specialization can help to strengthen China s global industrial competitiveness, and on that basis, some suggestions are given on how to improve that competitiveness.
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First price bidding with employment constraint in the SOE auction in China
WANG Hai  , ZHANG Weidong
Front. Econ. China. 2007, 2 (1): 63-66.
Abstract   PDF (387KB)
The transfer of SOE’s property right involves benefits readjustment of its stakeholders; therefore the design of the trading mechanism is not only to sell the SOE with a high price but also to realize other non-price objectives such as rearrangement of original employees, further development of the enterprise etc. This paper constructs a bidding mechanism with the constraint of accommodating employees to analyze the tradeoff between maximizing SOE auction revenue and minimizing induced unemployment. By adding that the winner is required to settle down a certain quantity of former SOE employees in the new enterprise, this mechanism brings on the competition among prospective investors in both the price and the quantity of employment, which can help the government to balance the different objectives more efficiently. However, the constraint will only work under the condition that the government has stressed sufficiently on the employees’ rearrangement and set the best constraint threshold. Moreover, the government should set an explicit compensation standard for the induced lay-offs to eliminate the investors’ accommodating cost dispersion and introduce more strategic investors with considerable heterogeneity to participate in the bidding.
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Direct effect of ownership and technology import: Firm level evidence from large and medium-enterprises in Shanghai
ZHU Pingfang, LI Lei
Front. Econ. China. 2007, 2 (1): 74-91.
Abstract   PDF (395KB)
This paper explores the direct effect of ownership and technology imports under the framework of neoclassical economic theory. The econometric analysis is based on panel data from a random sample of large and medium-enterprises in Shanghai, during the period of 1998 to 2003. The results show that Sino-foreign joint ventures, Sino-foreign cooperative enterprises and foreign-funded enterprises (SANZI) enjoy higher labor productivity and total factor productivity (TFP) than domestic enterprises. Intra-firm diffusion of non-codified technology, proxied by ownership, is the main source of their better performance, whereas internally transferred codified technology makes little contribution to TFP. For state-owned enterprises, codified technology imports have significantly raised both labor productivity and TFP, but such positive effect is significantly dependent on the S&T human resource. In contrast, no evidence supports that introduction of foreign technology has enhanced the productivity in domestic nonstate-owned enterprises. The empirical results indicate that SANZI do not have a distinct advantage in their codified technology. In addition, inadequate investment in assimilation process and research and development together with inefficient management of science and technology activities, may impede the use of imported technology.
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Regional development trend and scientific appraisal system
ZHANG Junkuo
Front. Econ. China. 2007, 2 (1): 79-97.
Abstract   PDF (722KB)
The report is a summing-up on the new trends, new characteristics, and new frame-work emerged in the regional development in China in the recent years, a drawing up of the indicators system of appraisal on regional scienceoriented development in accordance with the requirements of the scienceoriented development philosophy, an application of the indicators system in the appraisal respectively on the science-oriented development situations of the 4 regional agglomerations (or regional economic complexes) and the 31 provinces, metropolitan areas, and national autonomous regions, and an examination on the relationships of all sorts of indexes by using the sectional data of the just mentioned 31 units.
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FDI, domestic capital and economic growth: Evidence from panel data at China’s provincial level
LUO Changyuan
Front. Econ. China. 2007, 2 (1): 92-113.
Abstract   PDF (409KB)
Based on panel data at the provincial level in China, this paper found that direct effects foreign direct investment (FDI) had on economic growth were of insignificance. However, through improving technical efficiency and crowding  in domestic investment, FDI produced positive effects on China s economy. The state sector still played a major part in the total fixed investment, therefore, direct effects on growth were significant. Although private sector was increasingly important for the whole economy, it had no direct influences on economic growth. Meanwhile, neither the state sector nor private sector made contribution to the improvement on technical efficiency.
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Wage determination and returns to education in different ownerships of China: Evidence from quantile regressions
XING Chunbing
Front. Econ. China. 2007, 2 (1): 114-136.
Abstract   PDF (545KB)
In this paper, quantile regressions is used to estimate wage equations of different ownerships. Quantile regressions give us distributions rather than a single estimate of the returns both to education and experience in each ownership sector. For state-owned enterprises (SOE), the returns to education tended to be larger at the bottom of the conditional distribution of wages in 1991 and 1993, and there was no such trend in 1997. For the private sector, however, the returns to education tended to be larger at the top positions in 1993 and 1997. It is also found that the growth rates of the wages at the bottom of the conditional distribution of wages are higher than those at the top in SOEs. No such patterns for the private sector is found. It is suggested the wage mechanism in the private sector is more market-oriented.
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Zipf’s law and influential factors of the Pareto exponent of the city size distribution: Evidence from China
GAO Hongying , WU Kangping
Front. Econ. China. 2007, 2 (1): 137-115.
Abstract   PDF (348KB)
This paper estimates the Pareto exponent of the city size (population size and economy size) distribution, all provinces, and three regions in China in 1997, 2000 and 2003 by OLS, comparatively analyzes the Pareto exponent cross section and times, and empirically analyzes the factors which impacts on the Pareto exponents of provinces. Our analyses show that the size distributions of cities in China follow the Pareto distribution and are of structural features. Variations in the value of the Pareto exponent of city population size distribution are significantly explained by industrialization, industry structure and regional transportation infrastructure, and variations in the value the Pareto exponents of city economy size distribution are significantly explained by industrialization and regional transportation infrastructure.
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Precautionary motivation and consumption insurance: Empirical analysis of household consumption behavior in rural China
LUO Chuliang
Front. Econ. China. 2007, 2 (1): 137-150.
Abstract   PDF (348KB)
Based on a household survey in rural China, this paper discusses parameters such as precautionary motive, excess sensitivity, consumption insurance,and inter-temporal substitution in the household consumption function in rural China. The conclusions of the paper indicate that there is a significant precautionary motive in household consumption in rural China, but the function of consumption insurance is very limited, and the consumption is also excessively sensitive to the income change. Such parameters are different among consumers within different groups.
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