Jinjing Tian

Date of Graduation

2018

Document Type

Dissertation

Degree Type

PhD

College

College of Business and Economics

Department

Economics

Committee Chair

Feng Yao

Committee Co-Chair

Arabinda Basistha

Committee Member

Xiaoli Etienne

Committee Member

Joshua Hall

Abstract

The first chapter studies the finance-growth nexus with firm-level data to examine the impact of debt on firms' productivity growth in Chinese industrial firms, utilizing a newly-developed nonparametric threshold regression. It shows that while debt is overall positively related with productivity growth in Chinese industrial firms, each sample group exhibits a significant threshold effect of debt, beyond which the firms' debt exhibits diminishing returns on productivity growth. Also, the magnitude of both the estimated threshold levels and partial effects of debt is heterogeneous across ownership types and regions, with state-owned enterprises (among ownership types) and firms in the western region (among regions) having the lowest threshold values. It also finds that debt negatively affects productivity growth for state-owned enterprises (SOEs) and firms in western region after the detected threshold, indicating an inverted U-shaped relationship between external debt and firms' productivity growth.;The second chapter studies the trade impact on labor share across countries, using a fixed effect semiparametric approach. The cross-country declined labor share has been partially attributed to rising trade openness. However, the roles of export and import in the literature were not studied separately and assumed to be homogeneous across countries. It proposes two hypotheses for how export and import can affect labor share differently and nonlinearly. It empirically tests the hypotheses by re-examining the trade-labor share nexus across 96 countries during 1970-2009, and it employs a partially linear model with fixed effect that allows a general functional form of trade variables to be estimated. Results are fairly consistent with the hypotheses, showing that while export (import) share significantly declines (raises) labor share, both effects diminish as the level of export or import share increases. The indicated nonlinear effects are significant and robust by controlling for related economic, social, and political factors. Also, it finds a significant heterogeneous impact of export and import across OECD and non-OECD countries, the implication of which is also discussed.;The third chapter identifies a potential link between neoclassical trade theory and labor share literature, showing that export potentially affects labor share neutrally through itself due to its associated trade theory, and non-neutrally through three non-trade channels commonly discussed in the labor share literature. Nonetheless, most existing studies focus only on the neutral effect of trade, leaving its non-neutral effects unexplored particularly from a micro-level foundation. Given that Chinese manufacturing industries has actively engaged in exporting sector with millions of labor participation, it empirically tests the relationship by employing firm-level data in Chinese manufacturing industries during 1998-2007. To alleviate the risk of model mis-specification, the it estimates the effect of export semiparametrically from a varying coefficient model with fixed effect. It implements a newly developed spline-backfitted kernel estimator to reveal the potential nonlinearity of export's impact. We show that the neutral effect of export significantly increases labor's share as expected, the non-neutral effects through the channels of firms' capital intensity, monopoly power, and capital-augmenting technological progress significantly pull down labor share, making the net effect of export less beneficial to workers and vary with firms' characteristics, regions, and time periods. The associated policy implication is given as well.

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