Window Dressing in the Public Sector: Evidence from China’s Compulsory Education Promotion Program Hanming Fang, Chang Liu, Li-An Zhou, Nov 15, 2023 We document public-sector window dressing behavior in China’s Compulsory Education Promotion Program during the 1990s. Window-dressing behavior has been well-documented in various organizations when an agent faces high-stakes incentives.
Unequal Transition: The Widening Wealth Gap amidst China’s Rapid Growth Yangtian Jiang, Yu Zheng, Lijun Zhu, Nov 08, 2023 We examine the drivers of rising wealth inequality in urban China since 1995. We highlight the intertwined nature of growth and equity during China’s transition toward a market-oriented economy.
Migration,Tariffs,and China’s Export Surge Chen Liu, Xiao Ma, Oct 18, 2023 China’s exports have increased dramatically in recent decades. We build a multi-sector spatial general equilibrium model and combine rich data sources to account for China’s export surge between 1990 and 2005 from three policy changes: China’s import tariffs, tariffs imposed on China’s exports, and barriers to internal migration in China.
Reluctant Entrepreneurs: Evidence from China’s SOE Reform Hanming Fang, Ming Li, Zenan Wu, Yapei Zhang, Oct 09, 2023 In this column, we examine how the presence of state-owned enterprises (SOE) affects the private sector by influencing the allocation of skills across SOEs, private sector waged employment and entrepreneurship.
Employee Output Response to Stock Market Wealth Shocks Teng Li, Wenlan Qian, Wei A. Xiong, Xin Zou, Sep 27, 2023 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.
Trade Policy Uncertainty and New Firm Entry: Evidence from China Chuantao Cui, Leona Shao Zhi Li, Sep 20, 2023 Exploiting China’s WTO accession as a quasi-natural experiment, this study finds that reduced trade policy uncertainty (TPU) in a major destination market promotes domestic entrepreneurial activities in China
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, 2023 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.
What Gets Measured Gets Managed: Investment and the Cost of Capital Zhiguo He, Guanmin Liao, Baolian Wang, Aug 09, 2023 To improve capital allocative efficiency, starting in 2010, Chinese regulators switched from using return on equity to economic value added (EVA).
Visible Hands: Professional Asset Managers’Expectations and the Stock Market in China John Ammer, John Rogers, Gang Wang, Yang Yu, Aug 02, 2023 Mutual funds have become an important type of private institutional investor in Chinese security markets, with assets under management exceeding $3 trillion.
Homemade Foreign Trading Zhiguo He, Yuehan Wang, Xiaoquan Zhu, Jul 26, 2023 Our recent study provides evidence that Chinese mainland insiders tend to evade see-through surveillance by round-tripping via the Stock Connect program.
How Liberalizing Trade with China Led to a Boom in International Students in the US Gaurav Khanna, Kevin Shih, Ariel Weinberger, Mingzhi Xu, Miaojie Yu, Aug 16, 2023 Focusing on China’s accession to the World Trade Organization, we show that Chinese cities with more exposure to trade liberalization sent more students to US universities.
Regional Variation of GDP per Head within China, 1080–1850: Implications for the Great Divergence Debate Stephen Broadberry, Hanhui Guan, Sep 28, 2022 We provide the first regional breakdown of GDP per head for China from the Song dynasty to the Qing, so that regions of similar size can be compared between Europe and Asia to establish the timing of the Great Divergence of living standards.
Combating Cross-Border Externalities Shiyi Chen, Joshua Graff-Zivin, Huanhuan Wang, Jiaxin Xiong, Sep 21, 2022 China implemented a pioneering policy in 2011, the Ecological Compensation Initiative (ECI), which establishes side payments between upstream and downstream provinces in the Xin’an River Basin.
Assessing and Addressing the Coronavirus-Induced Economic Crisis: Evidence from 1.5 Billion Sales Invoice Zhuo Chen, Pengfei Li, Li Liao, Zhengwei Wang, Aug 31, 2022 We probe the effects of the COVID-19 pandemic and the subsequent containment policies on business activities in China by exploiting big data on 1.5 billion sales invoices. The average drop in sales was between 23% and 35%, depending on firm size, for the 12-week period after the Wuhan lockdown.
Industrial Land Discount in China: A Public Finance Perspective Zhiguo He, Scott Nelson, Yang Su, Anthony Lee Zhang, Fudong Zhang, Jul 25, 2022 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.
Industry/Policy View Omnia Juncta in Uno: Foreign Powers and Trademark Protection in Shanghai’s Concession Era Laura Alfaro, Cathy Ge Bao, Maggie X. Chen, Junjie Hong, Claudia Steinwender, Jul 20, 2022 Trademarks, which identify the source of goods and services, account for the majority of intellectual property filings worldwide. We investigate how firms adapt to the introduction of trademark institutions by exploring a historical precedent: China’s trademark law of 1923, an unanticipated and disapproved response to end foreign privileges in China.
Dollar Funding Stresses in China Laura Kodres, Leslie Sheng Shen, Darrell Duffie, Jul 13, 2022 The need for US dollar funding during the financial stresses of March 2020, as the COVID-19 pandemic shocked markets, was evident in a number of countries (Avdjiev, Eren, and McGuire 2020; Bahaj and Reis 2020).
Serial Entrepreneurship in China Loren Brandt, Ruochen Dai, Gueorgui Kambourov, Kjetil Storesletten, Xiaobo Zhang, Jul 06, 2022 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, 2022 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.
Share Pledging in China: Funding Listed Firms or Funding Entrepreneurship? Zhiguo He, Bibo Liu, Feifei Zhu, Jun 01, 2022 Our recent study analyzes the use of share pledging funds in the context of China. Survey evidence shows that a majority of the largest shareholders (67.3%) used pledging funds outside their listed firms, including financing their entrepreneurial activities.