A Study on the Purchasing Power Parity Hypothesis: Evidence from China (구매력평가 가설에 대한 연구: 중국을 대상으로)
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- The Journal of Industrial Distribution & Business
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- v.10 no.2
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- pp.65-75
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- 2019
Purpose - Along with Chinese exchange rate's reform advancement, the issue of exchange rate of RMB has increasingly become the heated focus in the world. In July 2005, China carried out the reform of the exchange rate system, and this behavior has aroused the attention of the world. However, the dispute on whether the theory of purchasing power parity holds or not in China still exists. As such, this paper will attempt to explore whether the purchasing power parity is significant in China. Research design, data, and methodology - The monthly data from July 2005 to December 2017 will be employed to analyze the nominal exchange rate of RMB against the US dollar and the nominal exchange rate of RMB against the euro. Based on these datum, an empirical analysis will be conducted under the unit root test and the cointegration test to exploit the significance of purchasing power parity in China. Results - The findings of this paper reveal that an increase in China's consumer price index will lead to an increase in the RMB exchange rate, which will lead to the depreciation of RMB. Concomitantly, an increase in the consumer price index in the US and Europe will result in a decrease in the RMB exchange rate, which will lead to an appreciation of RMB. In general, in terms of the US, if US consumer price index increases by 1%, China's nominal exchange rate against US dollar will decrease by 0.905%; if China's consumer price index increases by 1%, China's nominal exchange rate against US dollar will increase by 0.648%. In terms of Europe, if Europe consumer price index increases by 1%, China's nominal exchange rate against euro will decrease by 0.277%; If China's consumer price index increases by 1%, China's nominal exchange rate against euro will increase by 0.235%. Conclusions - Generally speaking, the empirical evidences this paper provided show that the purchasing power parity theory has a certain explanatory ability for the decision of RMB exchange rate. As such, the purchasing power parity cannot hold completely, and China's government should continue to deepen the reform of the exchange rate system to improve China's exchange rate market.
We sought to define the main motivational factors promoting consumption of Prunus mume products. We surveyed both specialized high-volume consumers and public consumers, and focused on consumption of and preferences for Prunus mume and Prunus mume products. We investigated how products were preferentially consumed, purchase experience, purchase location, purchase price, consumption experience, factors important in a purchase decision, preference factors, dissatisfaction factors, consumption outlook, comments on new processed foods, and activation of consumption. A total of 534 responses were received and data were analyzed using the SAS program (Version 9.1) of the Frequency test; Chi-square test was used to detect significant factors. A greater percentage of high-volume(compared with low-volume) consumers processed personal products at home. The public consumer tended to buy commercial products. However, public consumers who were older, who had higher incomes, and who were heads of households, tended to both buy commercial products and to prepare foods at home. The common purchase methods used by high-volume consumers were internet and direct marketing, but the public consumer frequented department stores and hypermarkets. High-volume consumers observed that commercial products were expensive, and such consumers seemed to be particularly cost-sensitive. The decisive factor triggering purchase decisions in high-volume consumers was the geographical origin of the fruit, whereas the public consumer was more concerned with taste. In public, positive factors were that the product was good for health and had a pleasant taste. Some of those surveyed complained of a lack of variety in Prunus mume products and that the amount of Prunus mume in certain products was low. To promote and increase consumption, convenient-to-eat products with healthy images are needed.
This study investigated the effects of 'K-POP' preference on purchase intention of Korean products. Especially, it revealed the mediating role between the participation intention of Korean culture event and the purchase intention of Korean products. Further, we examined the difference in the path relation according to the use-behavior of Korean wave contents. In this proposed model, we can see 'K-POP' preference had a positive effect on participation intention of Korean culture event, but it was not significant for purchase intention of common products. The participation in Korean culture event had significant effects on the purchase intention of Korean culture products and the purchase intention of common products. However, the purchase intention of Korean culture products had no significant effects on the purchase intention of common products. Thus, our finding showed that higher preference of 'K-POP' did not make cause purchase intention of common products. Further, the higher the preference of 'K-POP' was, the higher the participation intension of Korean culture event was and, as a result, the purchase intention of common products got higher. In addition, path analysis results according to the media usage behaviors show that Chinese consumer who uses the internet and has a higher preference of 'K-POP' had a positive effect on the purchase intention of common products. Furthermore, it has a positive effect on both purchase intension of Korean culture products and purchase intension of common products. In case of Chinese consumer who use the television, radio and newspapers, K-POP preference had no significant effect on the purchase intension of common products.
Following the uprise of the Korean Wave, Korean big entertainment corporations, such as SM or YG, are selling cultural products through their subsidiaries. These cultural products or 'cultural goods' are using artists' images of the entertainments for various products including stationary, consumer electronics, cosmetics, snacks, etc, to produce significant profits. We focused on the level of marketing strategy that affects the intention of purchase of those cultural goods. Specifically, we classified three levels including product-level(quality and design), brand-level(price and brand name), and corporate-level(merchandising and sales methods) and investigated if consumer nationality has any effects on the relationship. Based on the survey results performed by 220 Korean and Chinese college students, we found that Chinese consumers generally have higher intention to purchase on Korean cultural goods. Especially, Chinese consumers showed that their purchase intention is affected by price and brand name strategies, thus we found that they are more sensitive to brand-level marketing strategies.
Agriculture is a primary industry that influenced by the weather or meterological factors more than other industry. Global warming and worldwide climate changes, and unusual weather phenomena are fatal in agricultural industry and human life. Therefore, many previous studies have been made to find the relationship between weather and the productivity of agriculture. Meterological factors also influence on the distribution of agricultural product. For example, price of agricultural product is determined in the market, and also influenced by the weather of the market. However, there is only a few study was made to find this link. The objective of this study is to investigate the effects of meterological factors on the distribution of agricultural products, focusing on the distribution of chinese cabbages. Chinese cabbage is a main ingredient of Kimchi, and basic essential vegetable in Korean dinner table. However, the production of chinese cabbages is influenced by weather and very fluctuating so that the variation of its price is so unstable. Therefore, both consumers and farmers do not feel comfortable at the unstable price of chinese cabbages. In this study, we analyze the real transaction data of chinese cabbage in wholesale markets and meterological factors depending on the variety and geography. We collect and analyze data of meterological factors such as temperatures, humidity, cloudiness, rainfall, snowfall, wind speed, insolation, sunshine duration in producing and consuming region of chinese cabbages. The result of this study shows that the meterological factors such as temperature and humidity significantly influence on the volume and price of chinese cabbage transaction in wholesale market. Especially, the weather of consuming region has greater correlation effects on transaction than that of producing region in all types of chinese cabbages. Among the whole agricultural lifecycle of chinese cabbages, 'seeding - harvest - shipment - wholesale', meterological factors such as temperature and rainfall in shipment and wholesale period are significantly correlated with transaction volume and price of crops. Based on the result of correlation analysis, we make a regression analysis to verify the meterological factors' effects on the volume and price of chines cabbage transaction in wholesale market. The results of stepwise regression analysis are shown in