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Does China’s Place-Based Land Policy Lead to Spatial Misallocation?
Min Fang, Libin Han, Zibin Huang, Ming Lu, Li Zhang, Nov 17, 2021After 2003, the Chinese central government implemented an inland-favoring land supply policy that distributed more construction land quotas to underdeveloped non-eastern regions. We investigate the effect of the policy and find that it drastically increased land and housing prices in more-developed eastern regions, which consequently created substantial spatial misallocation of land and labor. The policy seems to reduce regional output gaps; however, it hurt...
What Do a Billion Observations Say about Distance and Relationship Lending?
Haoyu Gao, Hong Ru, Xiaoguang Yang, Nov 07, 2018Using 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.
The Effect of Pollution and Heat on the Productivity of High-Skill Public Sector Workers in China
Matthew E. Kahn, Pei Li, May 22, 2019The quality of governance depends on public sector worker productivity. We use micro data from China to document that judges are less productive on polluted days. We find that public sector productivity elasticities are larger than the published estimates of private sector productivity elasticities with respect to pollution.
Internal Capital Markets in Business Groups and the Propagation of Credit Supply Shocks
Yu Shi, Robert Townsend, Wu Zhu, Sep 25, 2019Using business registry data from China, we show that internal capital markets in business groups can propagate corporate shareholders' credit supply shocks to their subsidiaries. An average of 16.7% local bank credit growth where corporate shareholders are located would increase subsidiaries investment by 1% of their tangible fixed asset value, which accounts for 71% (7%) of the median (average) investment rate among these firms...
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, 2023Chinese 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.
