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Taking Stock of Trade Policy Uncertainty: Evidence from China’s Pre-WTO Accession George Alessandria, Shafaat Khan, Armen Khederlarian, Dec 04, 2019
Taking Stock of Trade Policy Uncertainty: Evidence from China’s Pre-WTO Accession George Alessandria, Shafaat Khan, Armen Khederlarian, Dec 04, 2019 We propose a method to estimate the perceived likelihood of an uncertain increase in tariffs using the rise in trade flows in advance of the uncertainty resolution. We apply this framework to the uncertainty surrounding the U.S.’s annual renewal of China’s most-favored-nation (MFN) status in the 1990s. By matching the observed rise in imports in advance of U.S. Congress votes on the renewal, we find that the probability of non-renewal was low throughout the decade of uncertainty. Our estimated probability peaked in 1994 at 11 percent, decreased thereafter, and became negligible by the end of the decade. The mechanism we study raises a firm’s inventory costs and leads to a lower volume of trade when aggregated to the annual level.
Overpricing in China’s Corporate Bond Market Yi Ding, Wei Xiong, Jinfan Zhang, Nov 27, 2019 In China’s corporate bond market, the yield spread of newly issued bonds at their first secondary-market trade is on average 5.35 bps higher than the issuance spread. This overpricing is robust across bond issuances with different credit ratings, maturities, issuance types, and issuer status. Evidence suggests that competition among underwriters drives this overpricing through two specific channels—either through rebates to participants in issuance auctions or through direct auction bidding by the underwriters for themselves or their clients.
What Happens to Rural Labor Supply Following the Birth of a Son or a Daughter? Shing-Yi Wang, Nov 20, 2019 Our research shows that rural Chinese women's labor supply falls for one year following the birth of a daughter before returning to pre-birth levels while the negative impact of a son on women's labor supply is larger and persists for four years. Furthermore, there is a decrease in household cigarette consumption, and an increase in the mother's probability of being in school, her leisure time, and her participation in...
The Effect of the China Connect Chang Ma, John Rogers, Sili Zhou, Nov 13, 2019 We study the effect on Chinese firms of the Shanghai (Shenzhen)–Hong Kong Stock Connect. The Connect, introduced in the mid-2010s by the government, provided important capital account liberalization. It created a channel for cross-border equity investments into a select set of Chinese stocks while the overall capital controls policy remained in place. Using a difference-in-difference approach, we find that mainland Chinese firm-level investment is negatively...
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