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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.

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

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.