Asian Economic Journal

vLex
Publisher:
Wiley
Publication date:
2021-02-01
ISBN:
1351-3958

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  • The effect of experience and environment in private tutoring on human capital investment

    This study investigated how experience and the environment of private tutoring impact investment in human capital, utilizing panel data from Korea. We scrutinized the effects of past private tutoring expenditures and the local tutoring landscape on decisions regarding private tutoring expenditures. To mitigate potential selection bias, we employed Heckman's selection model, revealing a significant correlation between substantial past spending on private tutoring, competitive environments, and increased future investment. Notably, at the middle and high school levels, individuals who had experienced high private tutoring expenses and those situated in environments with elevated private tutoring expenditures surpassed those who had not. The findings indicate that substantial past private tutoring expenditures, coupled with highly competitive environments, may lower the current consumption baseline and elevate future benchmarks. This implies the potential emergence of a vicious cycle that could ensnare families by escalating educational costs.

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  • Navigating economic policy uncertainty: The role of digital transformation in export product switching

    This study explores two key objectives: examining the impact of economic policy uncertainty (EPU) on export product switching and assessing the role of digital transformation in moderating this relationship. Analyzing data from Chinese A‐share listed enterprises between 2007 and 2016, we find that heightened EPU significantly accelerates export product switching, leading firms to reduce both the scope (number of products exported) and quantity of their exports. Digital transformation plays a crucial role in mitigating the adverse effects of EPU by enhancing information‐processing capabilities and reducing information asymmetry. This strategic shift encourages firms to focus on core products while reducing non‐core product exports. The moderating effect of digital transformation is particularly significant in state‐owned enterprises (SOEs) and firms with weak internal corporate governance. These findings underscore the critical role of digital transformation in helping firms navigate uncertain economic environments, offering valuable insights for policymakers and business leaders aiming to enhance export performance through digital innovation.

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  • Professor Shinichi Ichimura: The visionary founder of the East Asian Economic Association
  • Political party affiliation and subjective well‐being: Evidence from China

    Utilizing longitudinal data from the China Family Panel Studies spanning from 2010 to 2020, this study examined the impact of affiliation with the Communist Party of China (CPC) on subjective well‐being (SWB). The results indicate that CPC affiliation exhibited a positive influence on an individual's SWB, and this conclusion was supported through a series of robustness checks. However, the positive effect diminished when addressing the issue of individual heterogeneity. The favorable effect of CPC affiliation was more pronounced among middle‐aged and older generations compared to the younger generation. The positive influence of CPC affiliation on life satisfaction experienced a decline in the recent period. Lastly, the positive impact of CPC affiliation on SWB could potentially be attributed to five plausible pathways: an increase in income, augmentation of assets, elevation in social status, the possibility of engaging in the public sector workforce, and a heightened sense of optimism for the future.

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  • Economic growth targets and carbon emissions: Evidence from 278 cities in China

    The existing literature tends to overlook the trade‐off between the local government's dual goals of achieving economic growth targets and protecting the environment. This study reveals the adverse effects that local governments may have on the environment under the pressure of economic growth, indicating that an increase in regional economic growth targets is associated with an increase in local carbon emissions. Using data from Chinese prefecture‐level cities from 2000 to 2021, we find a 1% increase in the GDP growth target is associated with an increase in carbon emissions per unit of GDP of 1.6%. The mechanism analysis indicates that a higher regional growth target results in the entry of highly polluting new enterprises and a reduction in environmental protection‐related inputs, which consequently leads to an increase in carbon emissions. The implementation of administrative and market‐based policies, including government policy planning and piloting of emission rights, can mitigate the driving effect of growth targets on carbon emissions. This study provides new evidence on the impact of regional economic growth pressures on carbon emissions and serves as an important reference for governments seeking to formulate effective carbon emission reduction policies.

  • Analysis of the transformation of demand willingness for housing reverse mortgages in China based on a scenario simulation experiment

    As the population rapidly ages, Housing Reverse Mortgages (HRMs) have emerged as a valuable addition to the multilevel pension insurance system, helping to alleviate the pressure on pension financing. However, the HRM market in China faces challenges due to the limited financial literacy among middle‐aged and elderly residents; there is a “cognitive bias” toward understanding the mechanisms and benefits of HRMs leading to “insufficient effective demand.” This study empirically investigates the likelihood of changing the “demand willingness” for an HRM through a scenario‐simulation experiment focused on HRM‐related information disclosure. The findings include: (1) Up to 46.78% of the subjects' attitudes toward adopting HRMs shifted from “unwilling” to “willing” after receiving disclosed information, indicating that cognitive bias significantly impacts the insufficient effective demand for these housing products. The information disclosure experiment can correct the inadequate financial literacy to a certain extent, thereby significantly enhancing the potential demand willingness. (2) After the experiment, subjects with strong motives to bequeath their property to family members (referred to as “strong bequest motives”) significantly changed their willingness to adopt HRMs (“demand willingness”). This suggests that a clear, comprehensive promotional strategy can better align middle‐aged and elderly residents' perceptions of the role of HRMs in protecting inheritances, reducing the impact of bequest‐related considerations on their financial decisions. (3) Participants initially exhibiting lower financial literacy also demonstrated notable shifts in their demand willingness postexperiment. Access to easily understood, high‐quality information appears to help older individuals recognize the potential benefits of HRMs, mitigating the negative effects of cognitive limitations on their decision‐making. These findings highlight the importance of enhancing financial literacy and promoting a better understanding of HRMs among middle‐aged and elderly individuals, which may effectively manage the challenges associated with an aging population and the pressures on pension financing.

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