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Data, Collateral, and Implications for the Credit Cycle

Leonardo Gambacorta, Yiping Huang, Zhenhua Li, Han Qiu, Dec 09, 2020

The use of massive amounts of data by large technology firms (big techs) to assess firms’ creditworthiness could reduce the need for collateral in credit markets. Using a unique dataset of more than 2 million Chinese firms that received credit from both an important big tech firm (Ant Group) and traditional commercial banks, we find that a greater use of big tech...

Faking Trade for Capital Control Evasion: Evidence from Dual Exchange Rate Arbitrage in China

Renliang Liu, Liugang Sheng, Jian Wang, Nov 25, 2020

We examine whether firms over-report international trade to evade capital controls for foreign exchange arbitrage, by specifically testing whether the aggregate bilateral trade data gap between trading partners is positively (negatively) correlated with the exchange rate spread when the spread is positive (negative). At the disaggregated level, we also employ Benford’s law to detect trade data manipulations...

Verifying China’s COVID-19 Recovery Using the FRBSF China CAT

Remy Beauregard, John G. Fernald, Mark M. Spiegel, Dec 23, 2020

Using the FRBSF China Cyclical Activity Tracker, we confirm the robustness of China’s recovery from the COVID-19 downturn. The FRBSF “China CAT” estimates that first quarter 2020 China GDP plunged 6.4 standard deviations below its detrended level a year earlier, but by the end of the third quarter, China economic activity had recovered to only 0.1 standard deviations below trend. As such, the FRBSF China CAT index validates the accuracy...

From Fog to Smog: The Value of Pollution Information

Panle Jia Barwick, Shanjun Li, Liguo Lin, Eric Zou, Feb 05, 2020

During 2013–2014, China launched a nation-wide real-time air quality monitoring and disclosure program, which was a watershed moment in the history of its environmental regulations. We present the first empirical analysis of this natural experiment by exploiting its staggered introduction across cities. The program substantially expanded public access to pollution information, and in turn, triggered a cascade...

The COVID-19 Pandemic and Job Creation: The Role of Global Supply Chains

Hanming Fang, Chunmian Ge, Hanwei Huang, Hongbin Li, Dec 30, 2020

Using big data of more than 100 million posted jobs from China, we estimate how the COVID-19 pandemic affected local labor demand in China via global supply chains. The data reveal that the number of newly posted jobs was about 31% lower in the first 14 weeks after the Wuhan lockdown than comparable periods in 2018 and 2019. We show that COVID-19 cases abroad and foreign governments’ pandemic-control policies reduced new job creation in China by 11.7%...