Employee Output Response to Stock Market Wealth Shocks
Teng Li, Wenlan Qian, Wei A. Xiong, Xin Zou, Sep 27,
Exploiting individual-level data linking worker performance and stock investment, we show that a 10% increase in stock investment returns is associated with a decrease in the same investor’s work output by 3.8% in the following month.
Implicit Guarantees and the Rise of Shadow Banking: the Case of Trust Products
Franklin Allen, Xian Gu, C. Wei Li, Jun Qian, Yiming Qian, Sep 06,
The prevalent implicit guarantees provided by financial intermediaries have been a central feature of shadow banking products in China. Our theoretical investigation shows that providing implicit guarantees can be the second-best arrangement and mitigate capital misallocation.
Homemade Foreign Trading
Zhiguo He, Yuehan Wang, Xiaoquan Zhu, Jul 26,
Our recent study provides evidence that Chinese mainland insiders tend to evade see-through surveillance by round-tripping via the Stock Connect program.
China’s Growing Presence in Tax Havens: Implications for Policy and Research
Chris Clayton, Antonio Coppola, Amanda Dos Santos, Matteo Maggiori, Jesse Schreger, Jul 12,
Chinese firms are increasingly utilizing tax havens like the Cayman Islands, Bermuda, and the British Virgin Islands to raise large sums of capital from foreign investors, accounting for over 60% of total offshore equities by 2020.
Industrial Land Discount in China: A Public Finance Perspective
Zhiguo He, Scott Nelson, Yang Su, Anthony Lee Zhang, Fudong Zhang, Jul 25,
Local governments, which serve as monopolistic land sellers in China, face a trade-off when deciding to supply residential land versus industrial land. This trade-off is determined by the different time profiles of revenues from industrial and residential land sales, local governments’ financial constraints, and the extent of local governments’ tax revenue sharing with other levels of government.
Serial Entrepreneurship in China
Loren Brandt, Ruochen Dai, Gueorgui Kambourov, Kjetil Storesletten, Xiaobo Zhang, Jul 06,
New firms have been an important engine of growth in the Chinese economy (Brandt, Van Biesebroeck, and Zhang 2012). Drawing on data on the universe of all firms in China, we study entrepreneurship and the creation of new firms in China through the lens of entrepreneurs who operate a series of firms over their lifetime, i.e., serial entrepreneurs (SE).
An Empirical Overview of Chinese Capital Market
Grace Xing Hu, Jun Pan, Jiang Wang, Jun 29,
We provide an empirical review of the Chinese capital market, focusing on the basic return and risk characteristics of its major asset classes, as well as a comparison to the US market. All major asset classes in China have significant higher volatilities than their counterparts in the US market, but they do not always yield larger returns. Small-company stocks, short-, medium-, and long-term treasury bonds outperform their US counterparts, while large stocks underperform and long-term enterprise bonds yield similar returns.