A Bridge on Economic Issues between China and the World
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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.
Going Bankrupt in China
Bo Li, Jacopo Ponticelli, Aug 26, 2020We use a new case-level dataset to document a set of stylized facts on bankruptcy in China and study how the introduction of specialized courts across Chinese cities affected insolvency resolution and the local economy. We find that specialized courts hire better-trained judges and are 35% faster at dealing with bankruptcy cases than civil courts within the same city. We also find evidence that their introduction benefited the local economy by fostering firm entry, increasing average capital productivity, and favoring the reallocation of employment out of "zombie" firm–intensive sectors.
Housing Booms and Shirking
Quanlin Gu, Jia He, Wenlan Qian, Oct 03, 2018Our research studies the incentive costs of China’s housing booms . We use the type and actual time stamps of 9.3 million credit card transactions by over 200,000 cardholders to detect non-work-related behavior during work hours. Employees respond to positive house price shocks with an immediate and permanent increase in their propensity to use work hours to attend to personal needs. Our estimate implies an elasticity of shirking propensity with respect to house price of 1.6. The effect is driven by homeowners, especially among owners with higher housing wealth. Further analyses point to negative productivity implications of the increased shirking.
FinTech Adoption and Household Risk-Taking
Claire Yurong Hong, Xiaomeng Lu, Jun Pan, Dec 16, 2020China has experienced a rapid increase in FinTech penetration in the form of offline digital payments over the past decade. Using unique account-level data on consumption, investments, and FinTech usage from the Ant Group, we find that FinTech can lower investment barriers and help households move toward optimal risk-taking. Inferring individuals’ risk tolerance from their consumption volatility, we find that individuals who are more risk tolerant benefit more from FinTech advancement. Examining the enhancement...
Improving State Effectiveness by Discouraging Civil Servants from Flattering Their Leaders
Alain de Janvry, Guojun He, Elisabeth Sadoulet, Shaoda Wang, Qiong Zhang, Mar 11, 2020Evaluation of public employees performance is essential to induce higher work efforts. We use an experiment in two provinces of china to explore how to design such evaluation. Results show that the incentive effect of evaluation can be larger if the employee does not know ex-ante who the evaluator will be, thus reducing attempts at personally influencing the evaluator and enhancing instead job achievements.
