Zhiyuan Chen

Assistant Professor
Business School
Renmin University


CV | 简历





Department of Trade Economics
Business School
Renmin University of China
Beijing, China

Working Papers

Finance, R&D Investment, and TFP Dynamics

This paper investigates the role of R&D investment in shaping the relationship between financial constraints and aggregate total factor productivity (TFP). I study a dynamic model in which R&D investment, which affects productivity evolution endogenously, is subject to financial constraints. I parameterize the model with production, innovation, and balance sheet data. The estimated model implies sizeable static TFP losses caused by capital misallocation and dynamic TFP losses from distorting R&D investment. The accumulation of internal funds reduces the static TFP loss gradually. In contrast, because R&D has a persistent effect on productivity, the dynamic TFP loss rises initially and declines later. Compared to a model with exogenous productivity, innovation investment makes firms less able to use self-financing to reduce TFP losses, and prolongs the transition. Endogenous productivity growth amplifies the gains in TFP and output from financial reform, and leads to a longer-lasting consequence from a credit crunch. Improving the pledgeability of intangible assets in China to be the US level reduces the static TFP loss only 0.4%, but the dynamic TFP loss by 7.1%.

Made and Created in China: The Role of Processing Trade [New Update!]
with Aksel Erbahar and Yuan Zi
Working Papers: CEPR Discussion Paper | Tinbergen Institute Discussion Paper

This paper proposes that processing trade, which played an important role in China’s export miracle, not only leads goods to be “Made in China,” but also “Created in China.” Using unique transaction-level trade data on firms’ branding information, we document four main findings. First, there exists a significant share of exporters that engages in both ordinary and processing export activities, and they exhibit superior performance in various margins. Second, even within firms, there is a tight link between firms’ export mode choice and brand ownership—own branded products are typically exported under ordinary trade regime while products under other firms’ brands are exported under processing trade regime. Third, there is a price premium associated with own-branded products. Fourth, Chinese firms intensify their branding activities when faced with favorable processing trade policies upstream. To rationalize these findings, we present a simple theoretical framework where firms with multi-attributes endogenously determine their specialization within the production network.

Identification and Estimation of Production Functions for Multi-Product Firms [Update Coming Soon!]
with Moyu Liao

We study a stylized model of multi-product firms with firm-product level heterogeneity with Hicks-neutral production technology. The productivity process allows flexible correlation between the production efficiency of different products. We characterize the moment conditions implied by the model and show that the production functions are non-parametrically non-identified without observing either the allocation of inputs or exogenous input price variations. If the production functions are in a parametric family and are point identified, we can use standard GMM method to estimate the parameter of interest. If the model is partially identified, set estimation method based on the moment equality conditions can also be used. In the case of the Cobb-Douglas production functions, we show the optimal input allocation rules can be solved in closed form. We also argue that the derived moment conditions identify the production functions. Monte Carlo evidence shows that our estimation strategy performs well. We then apply our methodology to a sample of agricultural goods manufacturing firms. The result shows the production functions of the multi-product firms differ from that of the single product firms even for the same product. We also find that multi-product firms produce their core (resp. peripheral) products at higher (resp. lower) technical efficiency than single-product firms. Lastly, we find a strong positive co-movement between the productivity shocks of different product lines.

Bank Competition, Policy Distortions, and Margins of Innovation [Update Coming Soon!]
with Mengbo Zhang

We study a model in which firms differ in their defaulting risks to investigate the relationship between bank competition and risky investment. Banks face asymmetric information when lending to firms and compete in a Betrand-Edgeworth game. In equilibrium firms with higher defaulting risks are credit rationed. We show that increasing banking competition enhances investment by firms with low defaulting risks at the extensive margin, and stimulates investment by firms with large defaulting risks. Employing a deregulation policy for city commercial banks in China, we find empirical evidence consistent with predictions of the model.


Is Cracking Down on Corruption Really Good for the Economy? Firm-level Evidence from China
with Xin Jin and Xu Xu, accepted by Journal of Law, Economics, and Organization

We study the impact of anticorruption efforts on firm performance, exploiting an unanticipated corruption crackdown in China’s Heilongjiang province in 2004. We compare firms in the affected regions with those in other inland regions before and after the crackdown. Our main finding is an overall negative impact of the crackdown on firm productivity and entry rates. Furthermore, these negative impacts are mainly experienced by private and foreign firms, while state-owned firms are mostly unaffected. We present evidence concerning two potential explanations for our findings. First, the corruption crackdown may have limited bribery opportunities that helped private firms operate. Second, the corruption crackdown may have interfered with personal connections between private firms and government officials to a greater extent than institutional connections between state-owned firms and the government. Overall, our findings suggest that corruption crackdowns may not restore efficiency in the economy, but instead lead to worse economic outcomes, at least in the short run.

A Cost-Benefit Analysis of R&D and Patents: Firm-level Evidence from China
with Jie Zhang and Yuan Zi, European Economic Review, 2021(133), 103633.
Published PDF | Online Appendix| Code

We extend the empirical framework by Peters et al. (2017) to include both R&D and patents in the productivity evolution. We provide a decomposition of the benefits of R&D into the patent and non-patent components, and a novel measure of the patent value conditioning on the firm's R&D investment. Using a sample of Chinese high-tech manufacturing firms, we find that (1) 47.8% to 67% of the benefits of R&D investment comes from non-patent R&D activities; (2) On average an invention (a utility model) patent causes around 0.76 (0.66) percent increase in the firm value; (3) The start-up costs of R&D are around ten times as large as the maintenance R&D costs. The counterfactual analysis shows that the lump-sum subsidy is more effective than the proportional subsidy in increasing the expected firm value and innovation probability. R&D continuers respond more actively than the R&D starters to the R&D subsidy.

Types of Patents and Driving Forces behind the Patent Growth in China
with Jie Zhang, Economic Modelling, ​2019 (80), 294-302.
Published PDF | Working Paper

As a developing economy, China's unprecedented patenting surge is puzzling. We study China's patent surge and its driving forces using a novel and comprehensive merged dataset on patent applications filed by Chinese firms. We find that R&D investment, FDI, and patent subsidy have different effects on different types of patents. First, R&D investment has a positive and significant impact on patenting activities for all types of patents under different model specifications. Second, the stimulating effect of foreign direct investment on patent applications is only robust for utility model patents and design patents. Third, the patent subsidy only has a positive impact on design patents. The results imply that FDI and patent subsidy may disproportionately spur low-quality patents.

Import and Innovation: Evidence from Chinese Firms
with Jie Zhang and Wenping Zheng, European Economic Review, 2017 (94), 205 -220.
Published PDF | Online Appendix | Working Paper

This paper investigates the relationship between imports and innovation by importing firms. We first construct a theoretical model in which imports stimulate innovation through cost-reducing knowledge spillovers. We then employ a combined micro dataset of Chinese manufacturing firms to estimate the effects of imported intermediates on the firm’s R&D investment. The dataset allows us to construct firm-year level instruments for importing and exporting that are uncorrelated with the innovation decision of the firm. Our estimations find that: (1) importing intermediates tends to increase importing firms’ R&D intensity; and that (2) exporting also increases importing firms’ R&D intensity. Examining the channels through which importing affects innovation, we find that importing from high-income sources has a greater impact on innovation. High-tech firms tend to experience greater increases in innovation intensity, as do private firms. Our results are supported by a series of robustness checks.

The Bank–Firm Relationship: Helping or Grabbing?
with Yong Li and Jie Zhang, International Review of Economics & Finance, 2016 (42), 385-403.
Published PDF | Working paper

This paper asks whether banks help or grab the enterprise in the real economy. Using the firm- level data on Chinese enterprises during 2001–2007, we find that interest payment of private enterprises is negatively related to the return on sales (ROS) and asset growth, which implies a detrimental effect of bank loans on private firms' performance. But this linkage is significantly positive for state-owned enterprises. Focusing on private enterprises, the grabbing impact from banks is strongest for firms without government subsidies, with low production values, with small size, or with low capital intensity. Our results are robust to alternative estimation approach and variable specifications. To conclude, the bank-centred financial system in China has assisted in the development of state-owned enterprises, while the development of private enterprises has been impeded by Chinese banks.


通讯作者, 与张杰, 吴书凤, 孙文浩 合作
经济研究 , 2020(07), 92-105.


通讯作者, 与张杰, 张帆合作
世界经济, 2016(6), 54-76.

本文在着重考虑企业全要素生产率测算方法、进口、直接与间接出口以及出口贸易方式等因素的基础上, 在统一的理论框架内,利用改进的倾向得分匹配方法,系统地检验了出口与生产率的关系。 研究发现:首先,中国企业在出口活动中既不存在明显的"自我选择效应",也不存在显著的"出口学习效应"。 其次,间接出口企业或从事加工贸易企业的出口活动不存在显著的"自我选择效应"与"出口学习效应"; 直接出口企业或从事混合贸易企业的出口活动存在显著的"自我选择效应",但这两种类型企业的出口活动只存在相对微弱的"出口学习效应"; 只有从事一般贸易的企业,其出口活动存在显著的"自我选择效应"和"出口学习效应"。

通讯作者, 与张杰, 新夫, 杨连星合作
经济研究 , 2015(10), 4-17,33.

对当前中国政府广泛实施的创新补贴绩效进行全面的科学检验与评价,是摆在学界和政策制定者面前的重大研究命题。 本文构建一个简单的理论模型,分析中国情景下政府创新补贴政策对企业私人研发投入的影响效应以及其中的作用机理, 并利用中国科技部的"科技型中小企业技术创新基金"和中国工业企业数据库的合并数据,对理论模型的研究命题加以检验。 本文发现:中国情景下政府创新补贴对中小企业私人研发并未表现出显著的效应。知识产权保护制度的完善程度, 会影响到中国情景下政府创新补贴政策对企业私人研发的作用效应。在那些知识产权保护制度完善程度越弱的地区, 政府创新补贴政策越能促进企业私人研发的提升;贷款贴息类型的政府创新补贴政策对企业私人研发造成了显著挤入效应, 而无偿资助等类型的政府创新补贴政策却未产生如此的挤入效应。在金融发展越是滞后的地区, 贷款贴息类型的政府创新补贴政策对企业私人研发的挤入效应越强。

通讯作者, 与张杰, 郑文平合作
经济学(季刊), 2014, 14(3), 1029-1052.

从进口角度来重新审视贸易开放对不同国家经济发展的作用,是该领域最新的关注点之一。 本文利用2000—2006年间中国工业企业和海关贸易统计库的合并数据,从中间品和资本品两个角度来研究进口对企业生产率所造成的作用效应。 多种检验结果发现:中间品进口规模和资本品进口规模与企业生产率之间均呈现显著正相关,说明中间品和资本品的进口皆对企业生产率产生促进效应。 由此证明进口是促进中国经济发展的重要渠道。从分样本的估计结果来看,中间品进口对无出口、有研发以及民营企业生产率的促进效应更为明显, 而资本品进口对有出口、有研发以及民营企业生产率的促进效应更为明显。特别值得注意的是,在考虑了进口的情形下,出口对企业生产率表现出非常突出的负向效应。 这为全面理解国际贸易对中国企业生产率的作用效应,提供了与以往研究视角不同的经验证据。本文的研究成果可为中国当前的进出口政策调整提供参考依据。

张杰, 刘元春合作
经济研究, 2013(10),124-137.

出口国内附加值(DVA)的测算是相关研究领域的前沿问题。本文从微观层面对中国企业出口国内附加值率(DVAR)进行测算。 在综合考虑了不同进口贸易方式特征、间接进口与资本品进口问题之后,测算结果发现:中国出口的DVAR从2000年的0.49上升到2006年的0.57; 加工贸易的DVAR显著低于一般贸易,外资企业DVAR显著低于本土企业;生产技术复杂程度高的行业具有较低的出口DVAR; 推动中国出口DVAR上升的主要动力是民营企业与从事加工贸易的外资企业。进一步的机制分析发现, FDI进入是导致加工贸易与外资企业DVAR上升的重要因素,这可能反映出中国并未获得真正的贸易利得; 对发展中国家和新兴国家的出口有利于我国出口DVAR的提升。本文的经验结果有助于解决有关中国对外贸易的重要争论, 并为中国对外贸易政策的调整提供参考依据。