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The income gap between the rich and the poor is growing in China. The Free Trade Zone policy has been adopted in China over the past decade. We analyze whether the Free Trade Zone policy contributes to China’s income disparity based on a panel of provincial level data covering the period from 2009 to 2017. The empirical results show that the implementation of the Free Trade Zone policy has significantly reduced China’s income disparity between provinces, but different regions have different effects. The impact of this policy on the distribution of income has significantly narrowed the income gap in the eastern region. Meanwhile, the policy effect is long lasting, with the influence of the policy increasing over time. In particular, the establishment of Free Trade Zones in provinces with relatively low income, low trade dependence and low innovation capability is more conducive to narrowing the income gap. Furthermore, the establishment of Free Trade Zones in provinces with a relatively high unemployment rate has obviously decreased the income gap; however, in provinces with a low unemployment rate, the income gap has increased. Our empirical results are robust with different model specifications.

Scholars and managers alike seek to better explain disruptive change and its effects on technological regimes. In this study, we apply two logics of change — Schumpeterian and punctuated equilibrium — and conduct a natural experiment to evaluate how a governmental intervention shock affected the sourcing of knowledge within an existing technological regime. In particular, we investigate the extent to which patterns of knowledge sourcing changed within the technological regime governing financial innovation. We find that patterns of knowledge sourcing change subsequent to the government intervention, but in more nuanced ways as predicted by Schumpeterian and punctuated equilibrium logic. Specifically, knowledge sourcing demonstrates an “accelerated” punctuated equilibrium change with knowledge convergence between incumbents and new entrants occurring under high levels of uncertainty, rather than when the regime stabilized. We discuss the implications on Schumpeter’s concept of creative destruction, as disruptive change may only undermine some aspects of an existing technological regime.

In this paper, I estimate the price elasticity of residential electricity demand using household-level panel data for Russia. The study takes advantage of the variation in tariffs across regions and over time, as well as the introduction of increasing block rate (IBR) schemes in a number of regions. I show that in those regions consumers appear to be aware of the block cut-offs, even though the latter are based on the prescribed social norms and are household and dwelling specific, to the point that there are up to a total of 31 different tier cut-offs. Based on these results, I estimate the price elasticity of electricity demand to be around −0.1. I also predict the associated changes in electricity consumption, CO₂ emissions, and revenues if similar IBR policies are implemented countrywide.