The Singapore Economic Review

China’s imbalanced sex ratio has increased the prevalence of hypergamous (marrying up) and hypogamous (marrying down) marriages. We explore the implications of this phenomena for satisfaction with one’s spouse in terms of sexual satisfaction along a range of dimensions, care received from one’s spouse, affection expressed to, and received from one’s spouse and the prevalence of domestic violence in the home. The main argument that we develop in the paper is that assortative mating is associated with higher satisfaction levels with one’s spouse because those involved in homogamous marriages will have more shared values, have more empathy for each other and be better able to communicate with each other, both in terms of everyday living and in terms of their sex lives. We test this argument using data from the China Health and Family Life Survey. We find considerable support for the argument that marrying up, or down, lowers satisfaction with one’s spouse.

Since its inception in 1978, the China National College Entrance Exam has consisted of two different exams: the humanities exam and the science exam. In September 2014, the State Council decided to abolish the two-exam system in 2017 to adopt a single-exam system. This paper studies if and how abolishing the two-exam system would affect both humanities and science students in terms of their probabilities of being qualified for the first-tier university pool and ultimately being admitted to their respective first choice, first-tier universities. Based on micro-level student data from an anonymous province from 2004 to 2007, we find that adopting a one-exam system is likely to significantly help the humanities students in their probability of being admitted to their first choice institutions.

Extrinsic motivation can play a healthy role in influencing student performance, however, in the developing world without outside intervention, the provider of such extrinsic motivation is usually one with limited means, such as the village school teacher, or a parent struggling to make ends meet. Hence, this paper asks the question: Can limited extrinsic motivation affect academic performance? In particular, we look at two types of extrinsic motivation: small rewards and some encouragement and examine which does a better job to motivate students. We find in this study that the promise of a reward leads to improvement in scores during the treatment period, however, encouragement improves student performance in the post-treatment period (during the national primary school leaving examination).

The objective of this paper is to theoretically and empirically identify the effects of hedging and systematic fluctuation on banking stability in China. First, theoretical propositions indicate that the impact of credit derivative hedging and systematic fluctuation on banking stability in China is derived on the basis of a newly established theoretical model. Then, empirical research based on one-stage and two-stage GMM methods suggests that ascending hedging degrees leads to a linearly improving condition for banking stability with respect to overnight lending swap hedging, an improving-then-worsening condition for compensation swaps and an improving–worsening–improving condition for deposit swap hedging; at the same time, the ascending level of systematic fluctuation associated with hedging improves banking stability. Moreover, the trade-off between loan expansion and the stability maintenance of banking sectors can be managed by hedging compensation swaps and overnight lending swaps. In general, the empirical results support the applicability of the theoretical model, and the hedging of certain swaps can be used as a tool for stability maintenance purposes.

This paper tries to check whether capital requirement policy has significant influence on bank loan growth by using a sample of regional banks in China from 2005–2008. The paper develops a simultaneous equation models to analyze the endogenous relationship between capital changes, loan growth and non-performing loans. The paper finds that during the sample years, capital condition indeed became a strict constraint for the loan growth of these banks This constraint also became more and more strict and significant across the sample years as the implementation of the policy carried on.

This paper attempts to identify whether the inflation expectation formation models adopted by Chinese agents are heterogeneous or homogeneous. A Gaussian mixture model is developed assuming that agents form inflation expectations by selecting a model from alternatives. Analysis results reveal that only adaptive expectation (AE) model is significant, indicating that both households and financial participants are fairly homogeneous in selecting inflation expectation formation models. Therefore, the mechanism of heterogeneous models is inoperative in explaining the heterogeneous inflation expectations in China, and the AE is the main driver of Chinese agents’ perceptions about cost.

Using a simple theoretical model, this paper provides a micro-foundation of applying vector auto-regressive (VAR) models to explore the effects of monetary shocks on stock market fluctuations. We analytically show that, when monetary shocks change investors’ wealth and portfolio liquidity, their degree of risk aversion associated with wealth and liquidity changes accordingly, which is then channeled to their investment decision and finally to the stock market fluctuations. Both the wealth effect and liquidity effect of monetary shocks have inter-temporal impacts on stock pricing. Therefore, monetary shocks and stock price fluctuations should be treated as a unified vector system that is auto-correlated. Based on the theoretical analysis, this paper further studies the impacts of different forms of monetary shocks on the Chinese stock market over the period 2005 to 2012 with a non-linear VAR model. We find that monetary shocks in China have significant and asymmetric effects on the stock market performance over different market cycles. Our estimation suggests that changes in monetary policy may increase stock market volatility, even though these monetary policies are often aimed at stabilizing the Chinese macro-economic activities.

The Structure–Industry–Project (SIP) framework is developed to account for the evolution of industrial structure in less-developed regions. The dynamic relationship between structure, industry and project is investigated from an integrative perspective, which is utilized to assess the role of national policy in reshaping the regional industrial structure. A new indicator is constructed to measure the differentiation of industrial structure of a province by employing data from 29 secondary industries of western provinces of China from 2000 to 2010. The basic result shows that the differentiation of industrial structure decreased instead of increasing during the past decade. Empirical evidence demonstrates that the dysfunction of the SIP interaction leads to decreasing differentiation of the industrial structure in a province. Specifically, the change of key industry is positively associated with the differentiation of industrial structure, whereas the role of project works in a contingent way. Moreover, the project in resource-industries plays a significant role in facilitating the differentiation of industrial structure while the projects in technology-intensive and high-tech industries do nothing. The findings in this study can provide suggestion for the government to improve the effect of development policies on the optimization of industrial structure in less-developed economies.

This paper examines the environmental kuznets curve (EKC) hypothesis for China in the presence of globalization. We have applied Bayer and Hanck combined cointegration test as well as the auto regressive distributed lag (ARDL) bounds testing approach to cointegration by accommodating structural breaks in the series. The causal relationship among the variables is investigated by applying the vector error correction method (VECM) causality framework. The study covers the period of 1970–2012. The results confirm the presence of cointegration among the variables. Furthermore, the EKC hypothesis is valid in China both in short and long runs. Coal consumption increases carbon dioxide (CO₂) emissions significantly. The overall index and sub-indices of globalization indicate that globalization in China is decreasing CO₂ emissions. The causality results reveal that economic growth causes CO₂ emissions confirming the existence of the EKC hypothesis. The feedback effect exists between coal consumption and CO₂ emissions. CO₂ emissions Granger causes globalization (social, economic and political).