What Do a Billion Observations Say about Distance and Relationship Lending?

Haoyu Gao, Hong Ru, Xiaoguang Yang, Nov 07, 2018

Using big data of the locations of bank branches and borrowers in China, we document a non-trivial amount of distant lending. The inter-firm network helps banks collect soft information which facilitates the distant lending. We also use novel data of monthly internal loan rating changes to directly measure soft information and find that banks have better soft information and predict delinquent events more accurately for borrowers connected via the inter-firm network.

Book Synopsis The Clash of Capitalisms? Chinese Companies in the United States

Ji Li, Oct 31, 2018

Chinese companies in the United States are generally adaptive to their host country’s legal and regulatory institutions. However, the adaptation varies in accordance with the companies’ ownership structure and the institutional distance between the two countries across different subject matter areas.

GDP Management to Meet or Beat Growth Targets

Changjiang Lyu, Kemin Wang, Frank Zhang, Xin Zhang, Oct 24, 2018

We apply the discontinuity methodology from the accounting literature to a political economy setting of GDP reporting and examine whether Chinese local governments manage regional GDP numbers. We find strong evidence of discontinuities around zero in the distribution of actual minus target GDP growth rates. The frequencies of just meeting or beating GDP growth targets are about five (four) times the frequencies of just missing targets at the prefecture (province) level. The results are stronger for governors with longer tenures and those without political connections to higher-level officials as well as for local governments with more resources under their control.

Who Captures the Power of Pen?

Jiaxing You, Bohui Zhang, Le Zhang, Oct 17, 2018

We study how government control affects the roles of the media as an information intermediary and a corporate monitor. Comparing a large sample of news articles written by state-controlled and market-oriented Chinese media, we find that articles by the market-oriented media are more critical, more accurate, more comprehensive, and timelier than those by the state-controlled media. Moreover, only articles by the market-oriented media have a significant corporate governance impact. Subsample analyses, interviews with journalists, and a survey of university students suggest that the market-oriented media’s superior effects are explained by their operating efficiency and independence.


Human-Capital Externalities in China

Edward L. Glaeser, Ming Lu, Oct 10, 2018 

Housing Booms and Shirking

Quanlin Gu, Jia He, Wenlan Qian, Oct 03, 2018 

Panda Games: Corporate Disclosure in the Eclipse of Search

Kemin Wang, Xiaoyun Yu, Bohui Zhang, Sep 26, 2018 

China’s Overwhelming Contribution to Scientific Publications

Qingnan Xie, Richard B. Freeman, Sep 19, 2018 

Evidence of Precautionary Savings in China

Hui He, Feng Huang, Zheng Liu, Dongming Zhu, Sep 05, 2018 

Can a Housing Boom Lead to Rent Inflation?

Honglin Wang, Fan Yu, Yinggang Zhou, Aug 24, 2018 

The Dynamic Effects of Computerized VAT Invoices on Chinese Manufacturing Firms

Haichao Fan, Yu Liu, Nancy Qian, Jaya Wen, Aug 08, 2018