Research. |
Working Papers
Geo-politics and the impact of China's outward investment on developing countries: evidence from the Great Recession (under review)
Working Paper Version:
Did Chinese Outward Activity Attenuate or Aggravate the Great Recession in Developing Countries? CESifo Working Paper Series No. 5737
with Dr. Bastian Gawellek and Prof. Dr. Bernd Süssmuth
Using a novel dataset on Chinese large-scale overseas investment and project contracts by sector and mode of entry, we analyse whether Chinese outward activity (COA) before the recent crisis worsened or alleviated the contractionary phases in developing countries. We find that, on average, COA did not increase vulnerability to the global recession. However, both the sectoral targeting and the size of the pre-crisis engagement matter: While COA in financial market sectors tends to imply an aggravation, substantial pre-crisis investment in the energy, metals and transportation industries tends to imply an attenuation of a crisis. The mode of entry, i.e. through either greenfield investment or mergers and acquisitions, also matters.
JEL classification: F20, F30, F40, F63
Keywords: Global crisis, offshoring, developing countries, sectoral transmission
JEL classification: F20, F30, F40, F63
Keywords: Global crisis, offshoring, developing countries, sectoral transmission
Global Linkages across Sectors and Frequency Bands: A band spectral panel regression approach
with Prof. Dr. Bernd Süßmuth
In this paper, we introduce the technique of band spectral panel regression (BSPR) to analyse global linkages across sectors and frequency bands. Methodologically, BSPR relies on dissecting time series–allowably measured in mixed frequency–into “deviation cycle” dynamics by frequency band and computing measures of real co-movement, trade linkage, financial market integration, and policy coordination by frequency band from it. Considering intra-industry as well as inter-industry linkage indicators, we apply it to data of contemporary China and its major trading partner economies. We allow for band-specific fixed effects and band-industry-specific interaction terms. In particular, for labor intensive industries co-movement through intra-industry trade linkages is found to be band-specific. Moreover, our results are most helpful in clarifying the puzzle of financial globalization implying regionalization or rather synchronization of international business cycle dynamics.
JEL classification: C32, C49, E32, F40
Keywords: Spectral regression; frequency domain; cyclical co-movement; sectors
JEL classification: C32, C49, E32, F40
Keywords: Spectral regression; frequency domain; cyclical co-movement; sectors
The Impact of Different Oil Shocks on Stock Market Return and Volatility: New Evidence from China
sole author
This paper contributes to the empirical studies on the relationship between oil shocks and stock market for China by thoroughly examining the effects of oil shocks with different origins on both the stock returns and the stock volatilities, taking into account sectoral and market-timing heterogeneities. A generalized autoregressive conditional heteroskedasticity in the mean (GARCH-M) framework is utilized to investigate the effects and a structural vector autoregression (SVAR) model is exploited to retrieve proxies of three oil shocks. It is shown that, neither Chinese sectoral stock returns nor the sectoral return volatilities respond to oil supply shocks, whilst oil demand-side shocks are corroborated negatively affecting stock returns and volatilities. The negative effects are not homogeneous across sectors or market timings (the bull, bear, and bumpy markets). A robustness check which substitutes the source of crude oil prices confirms the results.
JEL Classification: C58, E32, Q43.
Keywords: Oil Shocks, Stock Returns and Volatility, GARCH in mean, China
JEL Classification: C58, E32, Q43.
Keywords: Oil Shocks, Stock Returns and Volatility, GARCH in mean, China
The Impact of Chinese Language & Culture Learning Opportunities Abroad on Overseas Students in China
with Yue Huang
Overseas students in China have increased substantially over the last two decades, as has the number of Confucius Institutes abroad. Using official and self-compiled data by country of origin on Confucius Institutes and overseas students in China, we investigate the research question empirically whether increasing Chinese language and culture learning opportunities abroad has exerted a positive effect on the number of students who migrate to China for study. Using a panel data of 182 countries from 2002 to 2014 and exploiting a fixed effects model, we find evidence for a sizeable positive effect of Confucius Institutes in a country on the number of overseas students it has in China. We also find evidence for effect heterogeneity by geographic distance to China, country's income level and the linguistic distance to Chinese.
JEL Classification: F22, I20.
Keywords: Confucius Institute, Migration, Overseas Student, China
JEL Classification: F22, I20.
Keywords: Confucius Institute, Migration, Overseas Student, China