A Bridge on Economic Issues between China and the World
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Income Inequality among Old Chinese
Katja Hanewald, Ruo Jia, Zining Liu, Oct 16, 2019Using data from the China Health and Nutrition Survey (CHNS) from 1991–2015, we decompose the income inequality among old Chinese and compare the income inequality between old households and young households. We develop an OLG model and a new empirical method to test how initial socioeconomic differences transmit to income inequality in the working years and then in old age. We find that the urban-rural gap and educational differences...
The Role of Punctuation in the P2P Lending Market
Xiao Chen, Bihong Huang, Dezhu Ye, Apr 04, 2018Using data from Renrendai, one of the largest P2P lending platforms in China, we investigate how the amount of punctuation used in loan descriptions influences the funding probability, borrowing rate, and default. The empirical evidence shows that the amount of punctuation is negatively associated with the funding probability and borrowing rate. We propose that the usage of punctuation affects the readability of a loan description and reflects borrowers’ self-control and cognitive ability.
Does Good Luck Make People Overconfident? Evidence from a Natural Experiment in China
Huasheng Gao, Donghui Shi, Bin Zhao, Aug 01, 2018We find that retail investors who win an allotment for an IPO subscription subsequently become more overconfident relative to retail investors who do not have an allotment. The former group subsequently trades more frequently and loses more money. Overall, our evidence indicates that the experience of good luck makes people more overconfident about their prospects.
Industrial Policy in China: Some Intended or Unintended Consequences?
Jing Cai, Ann E. Harrison, May 30, 2018We explore the consequences of a 2004 tax change in China that reduced the value-added tax (VAT) on equipment investment. While the goal was to encourage technology upgrades, we find little evidence that the reform achieved its intended results. Although firms shifted the composition of investment toward machinery, actual investment rates were unaffected. Firms replaced labor with machinery, leading employment to fall significantly in the treated provinces and sectors. Our results suggest that the primary impact of the policy was to induce labor-saving investment.
Is the Wife A Risk Mitigator? Evidence from Family Firms in China
Yue Pan, Jinli Xiao, Vincent W. Yao, Jian Zhang, Jun 06, 2018Firm-level decisions are largely made by corporate executives whose preferences and attitudes can be shaped by historical traits and what is happening inside their households. We investigate how the involvement of a founder’s wife through marital ownership influences the family firm’s level of risk-taking and explore the underlying mechanisms.
