A Bridge on Economic Issues between China and the World
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Panda Games: Corporate Disclosure in the Eclipse of Search
Kemin Wang, Xiaoyun Yu, Bohui Zhang, Sep 26, 2018We conduct a textual analysis and exploit an exogenous event — Google’s 2010 surprising withdrawal from the Chinese mainland — which significantly hampered domestic investors’ ability to access foreign information. Following Google’s exit, Chinese firms’ announcements concerning their foreign transactions become more bullish in comparison to similar announcements prior to the exit and to those that involve only domestic transactions. This finding suggests that firms strategically alter their disclosure behaviors when the channel to transmit information is severed.
The Reference Effect of Government Bonds on Corporate Borrowing Costs
Mark J. Flannery, Claire Yurong Hong, Baolian Wang, May 29, 2019It has been widely argued that government bonds can be used as a reference point for pricing corporate bonds. This “reference” role can reduce the cost of corporate borrowing. The authors study this question by examining a unique experiment in China. China issued two sovereign bonds denominated in U.S. dollars (USD) in October 2017, the first...
The Dynamic Effects of Computerized VAT Invoices on Chinese Manufacturing Firms
Haichao Fan, Yu Liu, Nancy Qian, Jaya Wen, Aug 08, 2018This investigation uses a balanced panel of large manufacturing firms to provide novel evidence on the dynamic effects of computerizing VAT invoices on tax revenues and firm behavior in China, 1998-2007. We find that computerization increases cumulative VAT revenues and increases the effective average tax rate. Furthermore, the evidence suggests that the effects of computerization change over time: tax revenue gains are likely to be smaller in the long run. Meanwhile, firms reduce output and input, and increase productivity monotonically over time.
Market Expanding or Market Stealing? Competition with Network Effects in Bike-Sharing
Guangyu Cao, Ginger Zhe Jin, Xi Weng, Li-An Zhou, Jan 16, 2019Positive network effects may lead to winner-takes-all in some markets. The column analyses dockless bike-sharing in China to show instead how an incumbent can benefit from positive spillovers from a competitor’s entry. In the case of bike-sharing, consumers multi-home, the market exhibits positive network effects, and investment by two firms is more cost-efficient than investment by one.
Growing like China: Firm Performance and GVC Position
Davin Chor, Kalina Manova, Zhihong Yu, Apr 14, 2021We use firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines. We document a sharp rise in the upstreamness of China’s imports, while the positioning of its exports has remained relatively stable, over the 1992-2014 period. Participation in global value chains thus appears to have facilitated an...
