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Title of the paper

Can cross‐holdings benefit consumers?

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Authors of the paper

Hao Cheng, Xiaoting Wu, Chenhang Zeng

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Journal, vol.(issue), pp

Journal of Economics

Volume 141, pages 245¡V273, (2024)

DOI: 10.1007/s00712-023-00850-x

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Abstract of the Paper

This paper investigates the effect of China¡¦s 2020 poverty alleviation goal on GDP reporting in poverty-stricken counties. We adapt Martínez¡¦s (2022) model to estimate differences in GDP-nighttime light elasticity between poverty and non-poverty counties, assuming this elasticity should be consistent across all counties without manipulation. Our findings reveal significant GDP overreporting in poverty-stricken counties following the announcement of the 2020 goal. We estimate these counties inflated their GDP figures by approximately 23%, meaning that for every 1% of actual economic growth, the officially reported GDP growth was about 1.23%. Event study analysis shows that overreporting increases as the target deadline approaches, suggesting escalating pressure on local officials to demonstrate performance. These results highlight the unintended consequences of top-down poverty alleviation targets and the potential for data manipulation in high-stakes policy environments.