A Bridge on Economic Issues between China and the World
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Outward FDI and Domestic Input Distortions: Evidence from Chinese Firms
Cheng Chen, Wei Tian, Miaojie Yu, Sep 08, 2021A recent study shows that domestic input distortions faced by private firms in China have generated extra incentives for those firms to invest and produce abroad. This finding helps explain an astonishing increase in China’s outward foreign direct investment (FDI) flows since the financial crisis.
Employment Protection and Corporate Cash Holdings: Evidence from China’s Labor Contract Law
Chenyu Cui, Kose John, Jiaren Pang, Haibin Wu, Oct 13, 2021We examine whether and how employment protection influences corporate cash holdings using Chinese firm-level data. Our empirical results show that labor-intensive firms in China significantly increased their cash holdings following the enactment of China’s Labor Contract Law. Further analyses suggest that the results are generally consistent with a “labor adjustment costs” channel: employment protection...
Good Finance, Bad Finance, and Resource Misallocation: Evidence from China
Jiapin Deng, Qiao Liu, Apr 03, 2024The development of finance driven by Chinese local governments exacerbates the problem of resource misallocation, whereas market-driven finance significantly improves allocative efficiency. This highlights the policy implication that modern finance in China should prioritize the efficient utilization of resources rather than mere expansion in scale.
Financial Spillovers of Foreign Direct Investment: Evidence from China
Haoyuan Ding, Shu Lin, Shujie Wu, Haichun Ye, May 08, 2024Foreign Direct Investment (FDI) has enhanced the financial conditions of Chinese enterprises, particularly through the financial spillover effects generated by supply chain connections, which have helped to reduce the burden of trade credit and increase opportunities for bank financing.
Financial Reporting and Disclosure Practices in China
Hai Lu, Jee-Eun Shin, Mingyue Zhang, Jul 04, 2024This article discussing that Chinese firms tend to emphasize the stability of financial performance in their reports. In contrast to U.S. firms, their financial disclosures are significantly swayed by non-shareholder stakeholders and do not leverage voluntary disclosures to mitigate capital costs.
