MIT China Seminar

https://mit.zoom.us/rec/share/AM7x11TV6HM3-jvYuSggn5U9NRJPOHEAn01OXd2vFGUcABKz-0RcXwPWq-fpOv3e.ANloHx0lLAzadZwP 
 

Jackson Lu, MIT Sloan School of Management, The Bamboo Ceiling

Abstract: Well-educated and prosperous, Asians are commonly viewed as the “model minority” in the United States. I challenge this rosy view by uncovering a “Bamboo Ceiling” in different contexts, including (a) leadership attainment, (b) job salary, and (c) academic performance. Across 7 papers using mixed methods, my research examines the Bamboo Ceiling’s scope, mechanisms, and potential solutions. In terms of scope, whereas most governmental and organizational statistics lump all Asians together as a single group, I distinguish among East Asians (e.g., Chinese), Southeast Asians (e.g., Vietnamese), and South Asians (e.g., Indians). My studies consistently found that East and Southeast Asians—but not South Asians—face the Bamboo Ceiling. In terms of mechanisms of the Bamboo Ceiling, I examined (1) assertiveness, (2) prejudice, (3) motivation, (4) facial characteristics, (5) ethnic homophily in social networks, and (6) organizations’ impression management, while accounting for English fluency, nationality, socioeconomic status, etc. In terms of solutions, I conducted a longitudinal field experiment to test whether a 9-week debate training can help participants break the Bamboo Ceiling. Theoretical and practical implications are discussed.

https://mit.zoom.us/j/97345286966?pwd=NFg3WmUyNEV4RW5ESmFMZ3pRYzU0UT09

 Margaret Roberts, University of California San DiegoCensorship's Effect on Incidental Exposure to Information: Evidence from Wikipedia
 

(Joint work with Jennifer Pan) 

Abstract:

The fast-growing body of research on internet censorship has examined the effects of censoring selective pieces of political information and the unintended consequences of censorship of entertainment. However, we know very little about the broader consequences of coarse censorship or censorship that affects a large array of information such as an entire website or search engine. In this study, we use China’s complete block of Chinese language Wikipedia (zh.wikipedia.org) on May 19, 2015, to disaggregate the effects of coarse censorship on proactive consumption of information—information users seek out—and on incidental consumption of information—information users are not actively seeking but consume when they happen to come across it. We quantify the effects of censorship of Wikipedia not only on proactive information consumption but also on opportunities for exploration and incidental consumption of information. We find that users from mainland China were much more likely to consume information on Wikipedia about politics and history incidentally rather than proactively, suggesting that the effects of censorship on incidental information access may be politically significant.

 https://mit.zoom.us/j/97345286966?pwd=NFg3WmUyNEV4RW5ESmFMZ3pRYzU0UT09.  

Lizhi Liu, McDonough School of Business, Georgetown University

From Click to Boom: The Political Economy of E-commerce in China

Abstract:

 A central question in political economy asks: how do developing states build market-supporting institutions (e.g., secure property rights, contract enforcement, and the rule of law)? Too often, political obstacles prevent developing states from adopting strong formal institutions. I propose that China has devised a novel solution to this political problem: institutional outsourcing. I argue that, with weak rule of law, the state has outsourced part of its institutional functions to key private actors -- digital platforms. Using as the context China’s e-commerce market, where 700 million active users generate more than 70 million transactions per day, I show that online trading platforms (e.g., Alibaba’s Taobao.com and Tmall.com) have developed strong private institution to substitute for formal institutional support. More specifically, platforms privately supply market-supporting institutions to enforce contracts, prevent fraud, and settle disputes. Not only do platforms enforce rules, but they also assist the state in creating and reforming formal institutions through institutional experiments. I demonstrate that institutional outsourcing is a more politically viable solution to market failure and governance deficit than the direct reforming of formal institutions, at least in some areas. Apart from institutional effects, e-commerce also has development implications. Combining a randomized control trial with new survey and administrative microdata, I show how e-commerce affects rural household welfare. This talk provides an overview of an ongoing book project on the political economy of China's e-commerce development. 

9-217  12:30 AM-2:00 PM-  THIS EVENT HAS BEEN CANCELLED

 Matthew Kahn, Bloomberg Distinguished Professor of Economics and Business Johns Hopkins University

E62-587     11:30 AM-1:00 PM

Raymond Fisman Slater Family Chair in Behavioral Economics, Boston University

Abstract: 

Social ties are associated with a straightforward efficiency tradeoff: improved efficiency from reduced information frictions versus favoritism. This tradeoff may be implicated both in promotion decisions as well as performance of duties in office. In this presentation, I will discuss several studies that explore the ways in which hometown ties affect the selection and performance of Chinese officials, drawing on evidence from three distinct settings: selection of fellows to the Chinese Academy of Sciences (CAS), selection of Politburo members, and performance of provincial auditors. Our selection results indicate that hometown connections have very different consequences in the two settings we examine – connections increase the probability of CAS selection (and lead to lower-quality fellows) but decrease the probability of Politburo selection. We discuss the factors that plausibly account for these differing results. Our auditor performance results also indicate greater leniency by auditors on officials in their hometowns. We conclude by emphasizing the importance of organizational and strategic considerations in assessing the likely impact of connections on the selection and performance of bureaucrats.
 

E62-446    11:30 AM-1:00 PM

Yiqing Xu, Assistant Professor, Department of Political Science, Stanford University 
 The Power of History: How A Victimization Narrative Shape Public Opinion in China

Abstract: 

Using an experimental approach, we study the effects of a government-promoted victimization narrative on public opinion in China. We motivate this study by showing a drastically increasing number of articles mentioning humiliations China and the Chinese people suffered in the late-Qing and Republican era in newspapers since the mid-1990s. To investigate its causal impact on people’s attitudes, we then conduct an online survey experiment, in which we introduce four treatment and control conditions, among a diverse sample of urban Chinese citizens. The first two treatment conditions are vignettes on the Boxer Rebellion and the subsequent foreign invasion of China during late Qing (1899-1901): one uses a victimization narrative—i.e. China was the victim of foreign invaders and the Boxers were not to blame for the invasion;  the other treatment mentions the same historical backdrop but emphases the atrocities committed by the Boxers. The third treatment condition is an article on China’s national women volleyball team winning an Olympic championship. The control condition is an article on interior design.  We have two main findings. First, compared with other conditions, the victimization narrative, on average, significantly raises the respondents’ suspicion of foreign government intentions in international affairs and shift their attitudes toward support for more hawkish foreign policies. The effects are more salient among respondents who previously hold less nationalistic views and who do not attend four-year colleges. Second, for these two subsamples of respondents, the victimization narrative also makes them more likely to believe positive statements about China (even when they are false) and reject negative statements about China (even when they are true) and increases their support for China’s current political system and trust in the government.  Our paper contributes to a deeper understanding of how an authoritarian government can boost its legitimacy and shape people’s policy preferences by appealing to a national (ingroup-outgroup) identity it helps to construct using narratives around historical events. 

E62-550     11:30AM - 1:00PM

Peter Lorentzen, Associate Professor in Department of Economics, University of San Francisco

Personal Ties, Meritocracy, and China's Anti-Corruption Campaign
 

Abstract: 

Using information revealed by China's anti-corruption campaign, we assess the competing meritocratic and personalistic models  of Chinese politics. Combining data on officials' personal networks revealed by the the first wave of the campaign (2012-2015) with biographical and economic data, we find evidence that arrests were focused on individuals, networks, and geographic regions that departed sharply from meritocratic governance practices prevalent in the rest of China. This is consistent with the government's own claim that the crackdown was designed to reduce corruption and improve governance. However, individuals with personal ties to Xi Jinping appear to be exempt from investigation, while individuals with ties to the other six members of the Politburo Standing Committee had no special protection. Taken together, these findings indicate that the crackdown served both its stated goal of strengthening the party and the unstated goal of consolidating Xi's power, providing highly qualified support for the meritocratic model.

E62-446     11:30 AM - 1:00 PM

Ruixue Jia

Associate professor of economics, School of Global Policy and Strategy, UC San Diego

Doing Business in China: Parental Background and Government Intervention as Determinants of Entrepreneurship
 

Abstract: We examine the parental determinants of entrepreneurship in contemporary China using multiple waves of a nationally representative survey between 2005 and 2012. While intergenerational transmission of entrepreneurship is a well-known regularity, we hypothesize that in an economy in transition out of central planning, those whose parents are government workers may also be more likely to become entrepreneurs. We show that both entrepreneurs and government worker parents have a higher likelihood of having children who own incorporated businesses. We then exploit the wide heterogeneity in government involvement in the economy across China. We find that government business-related fiscal expenditure weakens intergenerational transmission of entrepreneurship while it strongly increases the odds that business owners have parents who are government workers. We thus demonstrate that the local economic business environment shapes the influence of parental background on entrepreneurship.

Minyuan Zhao, Associate Professor of Management, the Wharton School, University of Pennsylvania

Intellectual Property (IP) Strategies in China: A Global Perspective

September 25, 11:30 AM-1:00 PM,

E60-112

Abstract: The IP environment has long been a major concern for multinational enterprises (MNEs) managing and competing in China. This talk discusses how MNEs can leverage their unique advantages and play a global game in their development, protection, and commercialization of IP in China. In particular, cross-border R&D teams, strategic choice of litigation locations, and entry decisions across the value chain are shown to reduce the impact of knowledge leakage and lower institutional risks. Meanwhile, leveraging the Chinese environment, such as the government’s promotion of strategic industries and speedy court decisions in certain technological sectors, also have important implications for the global competition among MNEs.

Meg Rithmire, F. Warren McFarlan Associate Professor of Business of Administration, Harvard Business School

Going Out or Opting Out? The Domestic Politics of Chinese Firms’ Internationalization 

October 25, 11:30 AM-1:00 PM

E62-550

Abstract: Chinese overseas investment has risen exponentially in the last ten years. An earlier literature viewed Chinese OFDI as dominated by large SOEs and concentrated in extractive industries. In the last six years, however, private sector investment has accelerated and Chinese OFDI spans sectors and geographies. I draw on extensive interviews and site visits with Chinese firms, regulators, and host countries and partners as well as an original database of all overseas M&A transactions of Chinese firms over the last 18 years to examine the motivations and strategies of Chinese firms going abroad. I find that firm strategies differ according to their domestic political position, and that much of the overseas investment since 2013 can be attributed to asset expatriation strategies on the part of “crony” capital. CCP policy toward capital liberalization is also a reflection of the heterogeneity of domestic firms: swings in policy can be explained by the CCP’s desire to make different policies for different kinds of capital. The research contributes to understandings of state-business relations in China and updates our knowledge of overseas investment from China.

Chang-Tai Hsieh, University of Chicago, Booth School of Business

November 29, 2018

E62-450

We use data on owners of the universe of Chinese firms to document the following facts about the largest Chinese firms from 1995 to 2015.  1)  The largest Chinese firms are conglomerates, where the largest 500 conglomerates in 2015 have an average of 17 thousand firms, and collectively account for almost half of all registered capital of all Chinese firms;  2) The largest conglomerates are linked via ownership networks; 3)  The size of the conglomerate is increasing in the size and decreasing in the productivity of capital of the firm at the "center" of the conglomerates; 5) Conglomerates are typically partnerships between private firms and state owned firms, where state owned firms are typically at the center of the conglomerates; 6) The number and size of Chinese conglomerates increased from 1995 to 2015.

Ma Jun, Northeastern University

February 14

11:30 AM-1:00 PM

E62-446

Growth Cycles and Business Cycles of the Chinese Economy through the Lens of the Unobserved Components Model

We build upon the most recent development in the literature and estimate a comprehensive set of univariate and bivariate Unobserved Components models to study the varying long-run growth rate and output gap of the Chinese economy for the period of 1952-2017. We find that the long-run growth rate varied substantially, and thus the growth cycles played an important role in the Chinese economy. Specifically, the long run growth rate accelerated since the late 70s, peaked in the early 90s, and since then has continuously declined except for several years right after China's entrance into the WTO. We also find that although the recent 4-trillion-Yuan economic stimulus package helped to sustain the economic growth temporarily it appeared to have accelerated the decline of the long run growth rate. We also find that the potential growth rate is estimated to be slightly above 8% as in 2017, but the output gap has become negative since 2014 and this recession at the business cycle frequency continuously deepened until the end of the sample.

Shuang Zhang, University of Colorado Boulder Boulder/NYU Shanghai

March 7

11:30 AM-1:00 PM

E62-446

Setting the Price Right: Evidence from Heating Price Reform in China

 
inefficient energy pricing and the lack of incentives to conserve energy are common problems in developing countries and result in substantial allocative inefficiency. We evaluate a recent major reform in the residential heating system in China that replaced a non-metered fixed payment system with a two-part tariff, called consumption-based billing. We develop an event-study research design that exploits quasi-experimental variation in the staggered rollouts of the reform over ten years. Using household-level daily heating usage data before and after the reform, we find that the reform induced substantial reduction in heating usage, by 37 percent reduction in four years. We also find evidence of learning. Households reduced heating usage gradually over time, with larger reduction in warmer days (i.e. days when the value of heating was relatively low) in later years. We then use plant-level emission data to examine environmental benefits of the reform. The reduced heating usage was associated with 35 percent reduction in SO2 emission concentration. We use these results to calculate the reduction in dead-weight loss that was produced by the policy. Our findings provide important implications for energy policy because a growing number of developing countries are in the process of implementing consumption-based energy billing in lieu of pre-existing inefficient fixed-charge billing.

Nan Jia, Associate Professor of Management and Organization,  Marshall School of Business, University of Southern California

April 11, 201911:30 AM-1:00 PM

E62-346

Abstract: 

Can China’s authoritarian government “command” its way to an innovation-driven economy—that is, by mobilizing the entire bureaucracy and society to embrace innovation? We examine this question by focusing on the issuance of patents, a common indicator of innovation, in China from 1990-2015. Since 2006, when Beijing launched a national campaign to promote domestic innovation, the production of patents has exploded. But we find significant regional variation that is not simply explained by levels of economic wealth—the political incentives of local leaders also influence patents production. Specifically, we find that cities where local leaders face strong peer pressure to compete on the growth of GDP and fiscal revenue produce the largest amount of patents, yet this does not affect the quality of patents in their portfolio. In other words, we identify two clear limits to Beijing’s ability to command its way to innovation through political campaigns and targets. First, the national drive for domestic innovation spurs larger quantities of patents, but not necessarily of higher-quality, as local leaders are assessed by numerical targets that measure quantity rather than quality. Second, even when the national leadership strongly prioritizes innovation, the production of patents is still conditional both upon local political incentives and local economic resources.   
 

Marshall Meyer, Emeritus Professor of Management and Tsai Wan-Tsai Professor Emeritus, Department of Management, The Wharton School, University of Pennsylvania

May 9, 2019

11:30 AM-1:00 PM

E62-446

Implementing Haier’s Made-In-China Management System at GE Appliances

Abstract: I address a classic but complex problem: integration vs. responsiveness of multinational firms. The firm is the Haier Group, China’s largest appliance maker and the largest appliance maker globally. The case at hand is Haier’s acquisition of GE Appliances, which closed in June 2016. Domestically, Haier is principally a B2C business. It is also highly decentralized. Key decisions are delegated to teams, currently called xiaowei qiye or microenterprises. These teams are arrayed along customer, product, and functional lines—there is no single organizing principle—supported by centralized R&D and a consumer database covering upwards of 100 million Chinese households. GEA, however, remains a B2B business. At the time of the Haier acquisition, GEA was centralized and functionalized, a classic “smokestack” firm. A year later, GEA decentralized along product lines. Decentralization has accelerated the pace of new product introduction, and while sales and share have grown, margins remain thin. A question is whether, in the spirit of integration, GEA ought to be a US test bed for Haier’s domestic management model or, in the spirit of responsiveness, adapt the this model to the challenges of the US appliance market.  

Ruixue Jia, Associate professor of economics, School of Global Policy and Strategy, UC San Diego

September 19, 2019

E62-446     11:30 AM - 1:00 PM

Doing Business in China: Parental Background and Government Intervention as Determinants of Entrepreneurship
 

Abstract: We examine the parental determinants of entrepreneurship in contemporary China using multiple waves of a nationally representative survey between 2005 and 2012. While intergenerational transmission of entrepreneurship is a well-known regularity, we hypothesize that in an economy in transition out of central planning, those whose parents are government workers may also be more likely to become entrepreneurs. We show that both entrepreneurs and government worker parents have a higher likelihood of having children who own incorporated businesses. We then exploit the wide heterogeneity in government involvement in the economy across China. We find that government business-related fiscal expenditure weakens intergenerational transmission of entrepreneurship while it strongly increases the odds that business owners have parents who are government workers. We thus demonstrate that the local economic business environment shapes the influence of parental background on entrepreneurship.

Yiqing Xu, Stanford University

E62-446     11:30AM - 1:00PM